DIAGRAM    I. SHOWING    THE    DISTRIBUTION    OF    THE 

WORK  OF  THE  ORGANIC  FUNCTIONS  IN  A  COMPLEX 
INDUSTRY,  SUCH  AS  A  MACHINE  SHOP. 

Note.  To  avoid  confusion,  only  the  principal 
features  of  the  organization  have  been  featured. 
Similarly,  lines  connecting  the  "principal  events  in 
the  passage  of  a  job  through  shops"  with  the 
various  sources  on  the  left  hand  of  diagram  have 
been  omitted.  The  colors  will,  however,  afford  the 
necessary  guidance. 

Study  of  the  diagrams  should  be  postponed  until 
after  the  description  of  the  Organic  Functions  has 
been  read. 

Compare  witi  Diagram  II  showing  the  Organic 
Functional  development  in  a  single,  continuous, 
chemical  industry. 


4  I#^-S0WING  THE  DISTRIBUTION  OP  THE 
I  OF  TI  ORGANIC  FUNCTION8  IN  A  COMPLEX 
STRY,  SH  AS  A  MACHINE  SHOP, 

..  Toxoid  confusion,  only  the  principal 
•s  of  t  organization  have  been  featured. 
fly,  lin  connecting  the  "principal  events  in 
issage  a  job  through  shops"  "with  the 
s  sour  on  the  left  hand  of  diagram  have 
mittecThe  colors  will,  however,  afford  the 
ary  g*nce. 

ly  of  diagrams  should  be  postponed  until 
the  diption  of  the  Organic  Functions  has 
read. 

aparich  Diagram  II  showing  the  Organic 
ionaPelopment  in  a  single,  continuous, 
cal  itry. 


INDUSTRIAL    MANAGEMENT    LIBRARY 


THE 


SCIENCE  AND  PRACTICE 
OF  MANAGEMENT 


BY 


A.  HAMILTON  CHURCH 


NEW  YORK 

THE  ENGINEERING  MAGAZINE  CO. 

1918 


Copyright,  1914 
By  THE  ENGINEERING  MAGAZINE  CO 


TS]55 


209166 


"Two  tasks  are  set  for  the  worker  in  any  science. 
One  of  these  is  to  enrich  the  chosen  field  by  the 
discovery  of  new  facts  and  the  statement  of  new 
experiences.  The  other  .  .  .  is  to  arrange  the 
facts  already  known  in  'the  'best  order  and  to  bring 
out  the  relations  between  them  as  closely  as  possi- 
ble. Whenever  progress  in  the  first  of  these  tasks  has 
been  rapid,  the  second  becomes  the  more  necessary, 
for  it  offers  the  only  possible  way  of  attaining  mas- 
tery .  .  .  and  of  bringing  the  science  as  a  whole 
into  a  convenient  and  serviceable 'form." — Wilhelm 
Ostwald,  "Fundamental  Principles  of  Chemistry." 

"There  has  not  yet  been  established  a  science  of 
management.  And  yet,  if  a  science  were  ever  need- 
ed, meaning  definite  principles,  based  on  exact  knowl- 
edge of  facts,  it  is  in  this  very  matter  of  manage- 
ment."— William  C.  Redfield,  "The  New  Indus- 
trial Day." 


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AUTHOK'S    PKEFACE 

Some  twelve  years  ago  *  I  advanced  the  proposi- 
tion that  manufacturing  activity  conld  be  analyzed 
into  certain  well-defined  factors,  some  of  which  were 
those  of  manufacturing  proper,  and  others  of  which 
were  assumed  by  the  manufacturer  for  his  own  con- 
venience. Among  the  latter  may  be  mentioned  as 
examples  the  land-owning  and  building-owning  fac- 
tors, and  the  factors  of  power  and  light  supply, 
all  these  being  undertakings  obviously  separable 
from  manufacturing  proper  and,  in  fact,  not  always 
being  assumed  by  the  owner  of  the  business. 

The  object  of  that  analysis  was  to  throw  clearer 
light  on  the  nature  of  indirect  expense  or  burden. 
It  was  found  that  by  isolating  these  special  factors 
and  ascertaining  their  value  separately,  instead  of 
throwing  them  into  the  general  pool  of  expense,  it 
was  possible  to  obtain  costs  that  were  a  much  nearer 
approximation  to  the  facts  of  manufacture  than  had 
been  possible  before.  It  is  pleasant  to  record  that 
this  view  of  expense  has  been  upheld  and  approved 
by  nearly  all  recent  writers  on  that  complex  sub- 
ject. 

The  method  therein  appKed  has  now  been  used 
in  an  analysis  of  the  facts  of  manufacturing  admin- 
istration. It  has  been  endeavored  to  ascertain  the 
fundamental  facts  of  production,  not  from  the  view- 
point of  costs,  but  from  the  viewpoint  of  manage- 

*  See  The  Engineering  Magazine,  January-June,  1901, 
article  on  The  Proper  Distribution  of  the  Expense  Burden. 
Issued  in  book  form,  1908.  Second  edition,  1913.  Also  see 
" Production  Factors",  published  1910.  Both  published  by 
The  Engineering  Magazine  Co.,  New  York. 

iii 


IV  PREFACE 

ment.  Instead  of  trying  to  throw  light  on  the  na- 
ture of  expense,  I  have  here  endeavored  to  throw 
light  on  the  nature  of  organization.  In  other  words, 
this  book  is  an  attempt  to  formulate  such  funda- 
mental facts  and  such  fundamental  regulative  prin- 
ciples as  may  be  hereafter  developed  into  a  true  sci- 
ence of  management. 

The  question  of  formulating  some  approach  to  a 
true  science  of  management  has  been  in  the  air  for 
some  time.  The  first  and  most  forceful  stirring  of 
the  subject  is  unquestionably  due  to  Mr.  Frederick 
W.  Taylor/ whose  paper  on  "Shop  Management/'  is- 
sued in  1903,  opened  most  persons'  eyes  to  the  fact 
that  administration  was  ceasing  to  be  an  empirical 
thing — a  kind  of  trade  secret,  known  only  to  a  few 
men — and  that  it  was  entering  a  stage  where  things 
could  be  reasoned  about  instead  of  being  guessed  at. 
Later  on  Mr.  Harrington  Emerson  emphasized  the 
human  element  in  the  problem — the  mental  quali- 
fications necessary  to  efficiency.  Unfortunately,  the 
useful  tendency  thus  initiated  soon  led  to  unfore- 
seen results.  The  phrases  "scientific  management" 
and  "efficiency"  became  the  stock-in-trade  of  num- 
berless amateurs  and  pretenders,  the  value  of  the 
movement  was  magnified  beyond  all  reason,  and  the 
public  were  led  to  believe  that  some  wonderful  new 
and  potent  instrument  for  getting  rich  quickly  had. 
been  discovered. 

The  fact  is,  however,  that  the  application  of  dis- 
connected ideas,  however  valuable  in  their  special 
place  these  may  be,  does  not  make  a  science.  That 
would  not  be  a  misfortune  in  itself,  but  it  becomes  a 
misfortune  when  the  one  is  mistaken  for  the  other, 
for  this  bars  the  way  to  real  progress.  In  the  rush 
to  apply,  the  necessity  to  construct  has  been  forgot- 
ten, and  I  believe  it  to  be  true  that  ten  years' 


PREFACE  V 

perience  of  "scientific  management'5  has  produced 
no  new  developments  of  importance,  obviously  be- 
cause its  elements  were  disconnected  ideas,  not  by 
any  means  universally  applicable. 

It  is  probable,  however,  that  the  art  of  manage- 
ment has  arrived  at  a  stage  of  development  where 
the  study  of  its  fundamental  facts  and  underlying 
principles  may  be  commenced.  In  the  spring  of 
1912,  in  conjunction  with  Mr.  L.  P.  Alford,  editor 
of  the  American  Machinist*  I  undertook  an  at- 
tempt to  reduce  the  regulative  principles  of  man- 
agement to  their  simplest  terms — that  is,  to  ex- 
press them  in  the  broadest  and  most  general  way — 
and  thus  to  provide  a  basic  classification  for  admin- 
istrative activity  on  which  a  detailed  structure  could 
subsequently  be  built  up.  We  found  that  all  the 
different  working  principles  common  in  manufac- 
turing could  be  reduced  to  one  of  three  main 
groups,  viz. : 

(1)  The  systematic  accumulation  and  use  of  ex- 

perience. 

(2)  The  economic  control   (or  regulation)   of  ef- 

fort. 

(3)  The  promotion  of  personal  effectiveness. 

These  regulative  principles  were  afterward  en- 
dorsed and  adopted  in  the  majority  report  of  the 
special  committee  appointed  by  the  American  So- 
ciety of  Mechanical  Engineers  to  investigate  the  new 
systems  of  management — a  fourth  principle,  namely, 
the  "transfer  of  skill/'  being  added  to  them  by  the 
committee,  f 

Following  up  the  line  of  inquiry  thus  started,  I 
contributed  a  series  of  articles  to  The  Engineering 

*  See  ' '  The  Principles  of  Management ' '  by  Church- Al- 
ford, American  Machinist,  May  30,  1912. 
f  See  Proceedings  of    A.  S.  M.  E. 


VI  PREFACE 

Magazine  (January-June  1913),  in  which  the  appli- 
cation of  these  principles  was  worked  out.  These 
articles  were  termed  "Practical  Principles  of  Ea- 
tional  Management",  because  at  that  time  the  pe- 
culiar feature  of  the  modern  system  seemed  to  be 
the  introduction  of  reasoning  into  management,  as 
opposed  to  the  old  rule-of-thumb  school.  But,  on 
reviewing  the  whole  matter,  more  recently,  the  im- 
portance of  the  idea  that  management  is  based  on 
the  existence  of  specific  organic  functions,  each  de- 
voted to  a  special  purpose,  developed  more  and  more 
strongly,  with  the  result  that,  though  the  matter 
of  those  articles  has  been  incorporated  in  this  book, 
most  of  it  has  been  rewritten  and  a  large  amount  of 
new  matter  has  been  added,  dealing  more  particu- 
larly with  the  facts  and  laws  on  which  every  kind 
of  manufacturing  management  must  be  considered 
to  rest.  This  book  has  been  somewhat  hurriedly 
written  in  the  midst  of  professional  work,  and  con- 
tains many  "gaps  and  overlaps",  in  defiance  of  the 
law  that  "Effort  must  be  co-ordinated".  The  reader 
will  no  doubt  observe  these,  and  it  would  give  the 
author  great  pleasure  and  assistance  if  any  of  them 
are  pointed  out  to  him  by  way  of  correspondence. 

A.  Hamilton"  Church. 

New  York,  March,  1914. 

Note. — Eeaders  of  The  Engineering  Magazine  articles 
will  be  assisted  by  noting  that  some  changes  in  nomen- 
clature have  been  found  desirable.  The  "spheres  of  activ- 
ity ' '  therein  mentioned  are  now  more  properly  called  ' '  or- 
ganic functions ; ',  since  they  represent  the  great  main  Muds 
of  activity  found  in  manufacturing  of  all  kinds.  The 
sphere  of  "organization"  has  yielded  to  further  analysis, 
and  has  been  decomposed  into  two  functions,  namely, 
"Equipment"  and  "Control".  Finally  the  phrase  "Con- 
trol of  Effort ' '  has  been  replaced  by  ' '  Eegulation  of  Ef- 
fort ' ',  this  change  being  purely  for  convenience  in  nomen- 
clature, and  implying  no  change  in  the  principle  itself. 


CONTENTS 

Author's  Preface  iii 

Object  of  book — an  attempt  to  formulate  fun- 
damental facts  and  principles  of  management — 
F.  W.  Taylor's  paper  on  Shop  Management — 
necessity  for  further  constructive  work — time 
probably  arrived  when  serious  study  of  manage- 
ment as  a  science  may  be  commenced. 

Chapter  I.     Introductory  1 

This  discussion  confined  to  Administration 
problems — excludes  questions  of  selling,  distri- 
bution and  finance — is  confined  to  Manufactur- 
ing of  Product — management  an  organic  affair 
— definition  of  what  is  meant  by  organic — ex- 
ample from  human  body — correct  parallel  is  not 
with  organs  but  with  functions — importance  of 
distinguishing  the  Organic  Functions  of  Man- 
agement— has  same  relation  to  business  manage- 
ment that  knowledge  of  anatomy  and  physiology 
has  to  a  physician. 

PART   I.     THE    SCIENCE    OF    MANAGEMENT 

Chapter    II.    The    Two    Great    Instruments    of 

Management   10 

The  problem  of  management  defined — its 
processes,  or  analysis  and  synthesis — over-em- 
phasis of  synthesis  characterized  past  practice 
■ — over-emphasis  of  analysis  threatens  modern 
practice — steps  in  the  development  of  practical 
analysis — time  study :  what  it  is  and  what  it 
does — conditions  disclosed  by  time  study — mo- 
tion  study — routing   of   product   and   layout   of 

vii 


Vlll  CONTENTS 

machines — planning  and  despatching-system :  its 
possibilities  and  its  failures — synthetical  meth- 
ods applied  to  industrial  management — the 
methods  of  synthesis — functional  organization 
and  grouping — the  five  organic  functions :  De- 
sign, Equipment,  Operation,  Control,  Compari- 
son— their  characteristics  and  fields  briefly  de- 
fined. 


Chapter  III.     The   Organic  Functions   of   Manu- 
facturing Organization   37 

Five  separate  varieties  of  Function  distin- 
guishable^— Each  seeks  a  separate  end  by  sepa- 
rate means — These  are :  Design,  Equipment,  Con- 
trol, Comparison,  Operation — do  not  apply  to 
anything  but  manufacturing — Organic  Functions 
are  water-tight  compartments — are  basic  and 
natural  divisions — consequently  have  independent 
efficiencies — raising  efficiency  of  one  Organic 
Function  does  not  raise  efficiency  of  the  others — 
First  Organic  Function,  that  of  Design,  consid- 
ered— is  the  prescriptive  function,  specifying  in- 
tention— is  the  source  of  all  productive  activities 
— always  present,  but  in  very "  different  degree 
according  to  the  industry — its  commencement 
and  final  limits — what  it  specifies — all  specifica- 
tion in  advance  is  an  act  of  Design — its  relation 
to   operation    schedules    and   time    study — Table 

I,  showing  scope  of  the  function  of  Design — 
Second  Organic  Function,  that  of  Operation,  con- 
sidered— aim  is  to  transmute  material  into  new 
forms  conformably  with  Design — What  Opera- 
tion comprises — is  the  most  highly  individualized 
function  in  any  plant — difference  between  tech- 
nology and  management — management  is  the 
science  of  applying  technology — but  does  not  in- 
crease efficiency  of  technology — efficient  manage- 
ment does  not  discover  technical  secrets — im- 
portance   of     observing    this     difference — Table 

II,  showing  scope  of  the  Organic  Function  of 
Operation — Design  prescribes  and  Operation  car- 
ries out — the  remaining  functions  are  set  up  in 
practice  only  to  assist  the  easier  functioning  of 
Design  and  Operation. 


CONTENTS  IX 

Chapteb   IV.    The   Organic    Functions   of   Manu- 
facturing Organization  (Continued) 63 

Design  and  Operation  are  the  primitive  func- 
tions;  Equipment,  Control  and  Comparison  are 
more  recent  developments — now  equally  impor- 
tant— The  Organic  Function  of  Equipment  con- 
sidered— is  the  function  that  provides  conditions 
— has  two  sides,  installation  and  administrative 
— the  first  includes  arrangement  of  buildings, 
power  plant,  transport  appliances,  storage  ar- 
rangements, layout,  etc. — second  comprises  the  . 
current  use  of  installed  equipment — good  condi- 
tions must  be  maintained  as  well  as  installed — ■ 
hence  the  "services"  of  Equipment — Table  III, 
showing  scope  of  the  Organic  Function  of  Equip- 
ment— the  independence  of  the  functions  illus- 
trated— each  separate  function  has  its  own  kind 
of  efficiency — this  can  be  hindered  but  never  in- 
creased by  the  efficiency  or  non-efficiency  of 
other  functions — this  fact  of  great  practical  im- 
portance^— The  Organic  function  of  Control  con- 
sidered— object  of  Control — together  with  the 
Function  of  Comparison  forms  the  nervous  sys- 
tem of  the  plant — Control  is  devolution  of  au- 
thority— close  parallel  with  nervous  system  of 
body — all  the  Organic  Functions  represent  suc- 
cessive devolutions,  the  primitive  craftsman  exer- 
cised them  all  in  his  own  person — Table  IV, 
showing  the  successive  devolution  of  the  Func- 
tions during  the  rise  of  an  industry  toward 
modern  conditions— were  devoluted  in  following 
order — Operation,  Equipment,  Design,  Compari- 
son, leaving  Control  as  the  "function  of  the  boss" 
— system  no  substitute  for  executive  capacity — 
Control  is  the  means  by  which  the  executive 
sub-divides  and  devolutes  his  function  as  "boss" 
— practical  terms  of  Control  stated — Table  V, 
showing  scope  of  the  Organic  Function  of  Con- 
trol— Control  is  the  great  organ  for  conducting 
manufacturing — The  Organic  Function  of  Com- 
parison considered — its  aim  is  to  find  how  far 
the  intentions  of  Design  and  the  orders  issued 
by  Control  have  been  realized — its  measures — 
has  two  aspects  dealing  respectively  with  proper- 
ties and  quantities — the  first  is  allied  to  Inspec- 


X  CONTENTS 

tion,  the  second  to  Accounting — watches  wastes 
— measurement  alone  useless  without  subsequent 
comparison — this  frequently  overlooked,  leading 
to  excessive  "system" — all  measurements  must 
be  compared  with  something,  preferably  stand- 
ards— complex  systems  of  Comparison  useless 
unless  Control  sufficiently  developed  to  make  use 
of  them — Table  VI,  showing  scope  of  the  Or- 
ganic Function  of  Comparison — final  remarks  on 
the  five  Organic  Functions — they  represent  the 
division  of  human  faculty  in  manufacturing — - 
are  natural  divisions  with  which  organization 
must  coincide  to  be  successful. 

Chapter  V.     The  Regulative  Principles,  or  "Laws 

of  Effort"  92 

The  Organic  Functions  are  set  going  by  the 
application  of  Effort — efficient  exercise  of  Effort 
requires  training — particularly  it  requires  basing 
on  experience — all  human  progress  is  due  to 
remembering  experience  of  past  generations — 
First  Law  of  Effort  considered ;  Experience  must 
be  accumulated  and  applied — In  starting  a  plant 
this  is  usually  recognized  to  some  extent — but 
process  must  be  continuous — accumulation  of  ex- 
perience must  go  on — its  practical  application 
must  also  go  on — Second  Law  of  Effort  consid- 
ered— Effort  must  be  economically  regulated — in 
industrial  matters  this  is  too  broadly  stated — 
Regulation  of  Effort  is  therefore  further  ana- 
lyzed— in  modern  manufacturing  we  have  to  do 
with  the  combined  and  simultaneous  Effort  of 
a  collection  of  men — analyzing  this  activity,  we 
observe  that  Effort  must  be  regulated  in  four 
ways;  it  must  be  Divided,  Co-ordinated,  Con- 
served (or  saved),  and  Remunerated — Division 
not  difficult,  but  implies  loss  of  control — there- 
fore needs  supplementing  by  co-ordination — Co- 
ordination the  converse  or  antidote  to  Division 
— means  the  avoidance  of  gaps  and  overlaps 
arising  from  imperfect  division — ensures  that 
Effort  as  divided  does  really  cover  the  whole 
field,  and  that  it  is  not  duplicated  unnecessarily 
— Conservation  of  Effort  is  the  quantitative  prin- 
ciple^— not  sufficient  to  divide  Effort,  nor  even  to 


CONTENTS  Xi 

avoid  gaps  and  overlaps  in  its  application  to 
work— too  much  Effort  may  still  be  involved- 
Conservation  of  Effort  requires  consideration  of 
how  to  eliminate  unnecessary  Effort  by  employ- 
ing best  methods,   condition  and  auxiliary  aids 

— -bmally    Effort    must    be    Remunerated this 

principle  has   to  do  with  the  ascertainment  of 
what   particular    direction    of   effort    should    be 
selected   for   encouragement   and   reward— these 
directions  will  vary  in  each  Organic  Function- 
it  determines  when  and  where   co   apply  incen- 
tive—but the  form  of  this  incentive  belongs  to 
the  application  of  the  remaining  Law  of  Effort 
—Third    and    Final    Law    of    Effort;    Personal 
Effectiveness     must     be     promoted  —  Personal 
Effectiveness  has,  first  of  all,  a  physical  basis 
—good  physical   conditions  are  therefore  neces- 
sary and  must  be  studied— it  has  also  a  psycho- 
logical  basis,   individual   characters   and   quali- 
fications must  therefore  be  studied— also  all  indi- 
viduals respond  to  incentive— therefore  forms  of 
incentive  must  be  studied— general  scope  of  this 
laW.u1Suthat  Qualit^  and  Quantity  of  Effort  put 
-forth   by  the   individual   are   controllable,   since 
they  depend  on  conditions— these  conditions  can 
be   studied  and  adjusted  so   as  to   extract  the 
best  results— the  youngest  and  least  developed  of 
all  the  Laws  of  Effort— has  very  important  prac- 
tical bearings— will  be  the  great  work  of  future 
years    to    develop    this    Law    more    definitely- 
Table   VII,    recapitulating   the  Laws    of   Effort 
—their  scope  is  to  show  what  to  look  for   what 
precautions     must     be     taken,     what     dangers 
should  be  avoided,  and  what  advantages  may  be 
realized  in  the  organization  and  management  of 
a  plant. 

Chapter  VI.     Practical  Application  of  the  First 

Law  of  Effort 212 

The  Organic  Functions  represent  five  different 
kin£Lof  aim~ that  te'  five  different  applications 
of  Effort  to  produce  five  different  kinds  of  re- 
sult—Effort defined  as  any  kind  of  human  ac- 
tivity undertaken  with  a  definite  end  in  view 
—hence    the    Organic    Functions    represent   five 


Xll  CONTENTS 

different  groups  of  men,  each  group  trying  to 
do  a  different  thing — Laws  of  Effort  must  have 
definite  bearing  on  efficiency  of  these  five  kinds 
of  Effort — each  of  these  groups  or  Organic 
Functions  will  be  affected  in  a  different  way — 
practical  application  of  first  Law  of  Effort  (1) 
in  regard  to  Design — use  of  experience  in  or- 
ganizing Design — to  the  experience  of  others  we 
add  some  private  experience  of  our  own  which 
gives  individuality  to  our  Design — (2)  in  re- 
gard to  Equipment — we  search  out  the  best 
conditions  for  production  as  embodied  in  Equip- 
ment and  adopt  them — great  progress  of  late  in 
this  respect — (3)  in  regard  to  Control — diffi- 
culty of  selecting  and  applying  experience  in 
organizing  this  function — existing  systems  of 
Control,  mostly  specific  or  arbitrary  combina- 
tions— new  plants  cannot  have  highly  developed 
mechanism  of  Control — importance  of  trying. to 
elucidate  principles  in  this  respect — Control 
must  be  developed  as  business  grows  in  size — 
(4)  in  regard  to  Comparison — more  experience 
available  than  in  case  of  Control — Accounting 
and  inspection  methods  already  well  developed — 
that  is,  methods  are,  but  what  should  be  re- 
corded and  why  it  should  be  compared  at  pres- 
ent largely  dependent  on  personal  taste — wide 
areas  of  comparison  awaiting  study — (5)  in 
regard  to  Operation — more  experience  available 
in  some  industries  than  in  others — in  others 
operations  largely  empirical  and  requiring  new 
study — Operation  the  most  individualized  func- 
tion in  any  plant — but  the  first  Law  of  Effort 
applies  just  the  same — experience  must  be  ac- 
cumulated and  applied  just  as  far  as  it  is  avail- 
able^—  (6)  in  regard  to  running  a  plant — heed  of 
recording  and  applying  progress  made  by  others 
— progress  constantly  being  made  in  all  the  Or- 
ganic Functions — ceaseless  vigilance  the  price  of 
progress — but  this  progress  is  of  five  kinds,  cor- 
responding to  the  five  Functions — must  be  gath- 
ered and  applied  by  different  persons  usually — 
great  practical  importance  of  recognizing  this. 
Table  VIII. 


contents  xiii 

Chapteb  VII.     Practical  Application  of  the  Sec- 
ond Law  of  Effort 130 

General  tendencies  of  Division,  Co-ordination, 
Conservation,    and    Remuneration    of    Effort    as 
applied   to  "the    Organic    Functions — Application 
of  Division  of  Effort  Considered    (1)   in  Design 
— gives  rise  to  parts — no  relation  to  design  of 
product    for    use — design    of    parts    often    em- 
braces that  of  tools  and  appliances,  and  speci- 
fication of  routine  in  Operation — processes  pre- 
scribed  must    tally    with    units    of    Operation— 
what  the   designer  must  keep  in  view — (2)    in 
equipment:   utilization  of  space; — layout — power 
plant — stores     and     transport — organization     of 
"services"  to  maintain  conditions — units  of  Divi- 
sion  in  regard  to   Equipment— (3)    in  Control: 
units    of    a    system    of    Control— installation    of 
Control— administrative   side — Orders  and  their 
handling — (4)  in  Comparison:  Comparison  units 
are  of  two  kinds— as  to   Properties— sphere  of 
Inspection — and  as  to   Quantities  and  Values — 
sphere   of   Accounting — need   of   clearly    setting 
out  Comparison  units,   since  Control   is  greatly 
facilitated  by  so  doing— (5)  in  Operation:  Oper- 
ation    units     are     processes — general     tendency 
towards  new  subdivisions — units  of  Design  must 
correspond  exactly  with  Operation  units — Table 
Nine — Application    of    Co-ordination    of    Effort 
Considered — in  all  functions  means  avoidance  of 
"gap    and    overlap" — in    Design    means    "limits, 
fits  and  tolerances" — in   Equipment  means   bal- 
ance of  Equipment  and  of  the  "services"  which 
maintain   conditions — in   Control    means   adjust- 
ment   of    spheres    of    duty,    and    supplementing 
limitations    of    written    Orders    by    Conferences 
and  Committees — in  Comparison  means  bringing 
together  unit  facts  in  a  significant  way — avoid- 
ance    of     duplication     of     work — in     Operation 
means  delimiting  the  sphere  of  similar  processes 
— gap  and  overlap  in  Operation  not  very  com- 
mon, since  it  would  stop  production. 

Chapter  VIII.     Second  Law  of  Effort  (Continued)   166 
Application    of    Conservation    of    Effort    con- 
sidered— in    general     means    guarding     against 


XIV  CONTENTS 

waste  of  Effort — in  Design  embraces  the  ques- 
tion of  transfer  of  skill  by  means  of  jigs — 
also  implies  standardization  of  parts,  of  tools 
and  auxiliaries,  and  of  stores — gives  rise  to  the 
sub-principle  of  "fewest  things" — in  Equipment 
means  shortest  path  of  travel  of  Product  as  con- 
trolled by  arrangement  of  Equipment — also  use 
of  conveying  appliances — in  Comparison  pre- 
scribes the  elimination  of  system — demands 
shortest  path  from  unit  fact  to  final  statistics 
— in  Operation  means  keeping  machines  at  work 
— keeping  technical  men  on  technical,  and  not 
clerical,  work — avoidance  of  fetching  and  carry- 
ing by  operators — Application  of  Remuneration 
of  Effort  considered — in  regard  to  the  work  of 
each  organic  function  means  the  study  of  what 
particular  type  of  efficiency  should  be  selected 
for  encouragement  and  reward — each  function 
examined  to  discover  these  types — different  ob- 
jects of  incentive  in  each.    Table  XI. 

Chapter  IX.     Practical  Application  of  the  Third 

Law  of  Effort 207 

Third  Law  considers  men  as  human  beings 
and  not  in  their  functional  aspect — ways  in 
which  personal  effectiveness  is  promoted — by 
setting  up  good  physical  conditions  and  environ- 
ment— what  are  good  physical  conditions — a  gen- 
erous minimum  to  be  aimed  at — different  stand- 
ards for  different  kinds  of  work — inefficiency  re- 
sults from  bad  conditions — but  such  may  escape 
notice — brief  enumeration  of  more  salient  con- 
ditions— direct,  indirect  and  protective — sense 
of  proportion  necessary — vocational  fitness — the 
special  field  of  the  new  industrial  psychology — 
great  caution  necessary — difference  between  psy- 
chological analysis  and  motion  study — case  of 
color-blindness  used  as  illustration — new  psy- 
chological analysis  not  confined  to  elimination 
of  unfit— will  be  constructive  also — Prof.  Muen- 
sterberg's  study  of  vocational  fitness  in  regard 
to  motormen — representing  facts  by  laboratory 
tests — reproducing  "inner  similarity  of  mental 
attitude"  found  in  working  conditions — practical 
verification  of  results — case  of  telephone  girls — 


CONTENTS  XV 

general  intelligence  factor — probable  practical 
value  of  the  new  method — but  chiefly  as  regards 
routine  work,  not  for  the  higher  posts.  Habit: 
value  of  industrial — habit  somewhat  forgotten 
of  late — industrial,  not  ethical,  standards  only 
in  question  here — habit  should  be  formed  on 
standardized  bases,  old  or  new — motion  study 
gives  new  ways  of  doing  things — these  should  be 
standardized  and  passed  into  new  habit — "writ- 
ten instructions"  a  nuisance  sometimes  unavoid- 
able— should  be  avoided  wherever  possible — Mr. 
H.  L.  Gantt's  work — principle  applies  not  only 
to  shop  workers  but  to  all  men  in  all  functions 
— overmuch  attention  focused  on  skill  factor  of 
late — other  habit  factors  of  great  importance — 
must  be  given  due  weight — "Inertia"  of  habit — 
habit  standards  not  necessarily  new  standards 
— examples. 

Chapter  X.     Third  Law  of  Effort  (Continued) 241 

Esprit  de  corps — definition — includes  "group- 
pride" — arises  from  personality — its  great  value 
— therefore  must  be  fostered — what  gives  rise 
to  it — essential  features,  among  which  is  belief 
in  purpose  for  which  group  is  organized — in  in- 
dustry means  product — excitement  of  propa- 
ganda— industrial  conquest — provides  stimulus 
already  used  in  salesmanship — needs  applying 
more  widely — esprit  de  corps  is  synthesis  of  the 
good-will  of  individuals — is  a  moral  force,  thus 
cannot  be  brought  about  by  mechanism — differ- 
ence from  enthusiasm — is  a  steady  force — based 
on  a  common  interest — therefore  men's  interest 
and  imagination-  must  be  aroused — can  be  ap- 
plied to  small  groups — examples — team-work 
and  co-operation  not  the  same  as  esprit  de  corps 
— which  gives  rise  to  them — workman's  idea  of 
what  constitutes  a  "good  shop." 

Chapter  XI.  Third  Law  of  Effort  (Continued) __  259 
Incentive — must  be  proportioned  to  the  Effort 
required — definitions — what  incentive  rests  on — 
may  be  material  or  moral — various  questions 
asked  about  it — Incentive  can  be  overdone — the 
sociological  Law  of  Average  in  Faculty — exist- 


XVI  CONTENTS 

ence  of  grades — individuals  rise  or  fall,  but 
grades  remain — incentive  must  correspond  to 
grades — relation  to  "customary  wages" — the  lat- 
ter the  result  of  long  experience  through  years 
and  generations — incentive  must  develop  facul- 
ties that  exist  ready  for  development — its  field 
is  not  to  raise  grades — practical  bearings  of  -this 
distinction — Emulation — must  be  used  to  foment 
interest — examples — group  incentive  independent 
of,  but  may  be  alongside,  bonus — appeal  to  dif- 
ferent kinds  of  self-interest — incentive  must 
have  two  aims,  combined — definition — case  of 
power-plant  considered — analysis  and  synthesis 
— incentive  in  operation  its  most  discussed  side — 
points  of  view  about  time  and  motion  study 
— profit-sharing — its  advantages  and  defects — 
labor  does  not  alone  produce  wealth — Table 
XIII. 

Chapter    XII.     The    Manager    and    the    Instru- 
ments of  Management 280 

Production  is  a  synthesis  of  functions — always 
present  but  not  all  equally  developed — some- 
times quite  rudimentary — how  is  synthesis  to  be 
effected — influence  of  strong  personality — leader- 
ship essential  to  great  results — manager  is  out- 
side science  of  management — must  use  its  prin- 
ciples, as  chemist  is  outside  the  science  of  chem- 
istry and  uses  its  principles  to  effect  his  aims 
— management  science  provides  the  instruments, 
their  successful  wielding  depends  upon  capacity 
of  manager — Resume  of  Functions  and  Laws  of 
Effort. 

PART    II 

PRACTICAL     ORGANIZATION     OF     THE    ORGANIC 
FUNCTIONS 

Chapter  XIII.    Organizing  the  Function  of  De- 
sign     299 

The  first  step  is  decision  on  product  to  be 
manufactured — next  step  is  selection  of  design — 
practical  operations  begin  with  organizing  draft- 
ing-room force — next  follows   analysis  of  prod- 


CONTENTS  XV11 

uct  into  components  suitable  for  manufacture- 
manufacturing  processes  require  division  of 
effort  and  co-ordination  of  effort — economy  of 
manufacture  requires  conservation  of  effort — the 
necessary  records  of  components  and  tools,  or 
the  "Book  of  the  Plant" — symbolizing — speci- 
fication of  material — specification  of  details  of 
operation — organizing  the  production  -  depart- 
ment force — establishment  of  standards — the  re- 
muneration of  effort  or  incentive  to  efficiency — 
conclusion — Table  XIV,  showing  applications  of 
analysis  to  the  function  of  Design. 

Chapter     XIV.     Organizing     the     Function      of 

Equipment  _. ._  318 

The  installation  of  equipment — proportioning 
equipment  —  balancing  equipment  —  arranging 
equipment — standardizing  conditions  of  manu- 
facture— organizing  the  equipment  service — re- 
muneration of  power,  building-maintenance,  re- 
pair and  cleaning  forces — conclusion — Table  XV, 
applications  of  analysis  to  Equipment. 

Chapter     XV.       Organizing     the     Function     of 

Operation     330 

The  functional  operation  defined — consists  of 
synthesis  of  processes,  trades  and  skills — it  is 
the  actual  technical  work  performed  on  ma- 
terial to  change  its  status — technical  and  ad- 
ministrative aspects  of  the  accumulation  of 
standardization  and  experience — standardizing 
processes  of  operation — general  ignorance  of  at- 
tainable standards  of  production — possibilities 
of  establishing  unit  standards  of  output — fixing 
total  productive  capacity — a  load  factor  of  iclle 
time — division  and  co-ordination  of  effort  in  pro- 
duction— remuneration  of  productive  labor — con- 
clusion— Table  XVI,  applications  of  analysis 
to  the  processes  of  production. 

Chapter  XVI.     Organizing  the  Function  of  Com- 
parison     347 

The  foundations  of  success  in  executive  man- 
agement— relations  of  accounting  to  the  execu- 


XV1U  CONTENTS 

tive — the  problem  of  overhead  burden — inspec- 
tion, one  of  the  first  functions  of  comparison — 
records  of  productive  and  non-productive  labor 
and  time — statistical  systems  and  departments 
— remunerating  the  inspection,  time-keeping  and 
cost-keeping  forces — conclusion — Table  XVII,  ap- 
plication of  analysis  to  the  function  of  Compari- 
son. 

Chapter  XVII.     Installation  of  Function  of  Con- 
trol     359 

This  function  plans  the  duties  within  all  the 
other  functions — administering  the  function  of 
control — the  mechanism  at  work — analyzing  the 
duties  to  be  performed  throughout  the  plant — 
determining  ranges  of  responsibility  and  author- 
ity— co-ordinating  duties  through  conferences  or 
committees — co-ordinating  the  line  and  staff — 
controlling  the  movement  of  materials,  the  move- 
ment of  instructions,  and  actual  operation — 
things  which  may  be  fixed  in  advance — estab- 
lishing habit — determining  specifications — stock- 
keeping — time-setting  for  material  movement — 
move  orders  for  work — despatching  work — Table 
XVIII,  applications  of  analysis  to  the  function 
of  Control. 

Appendix  I 397 

THE    LABOR    QUESTION 

Appendix  II 427 

THE  EXPENSE  BURDEN  IN  RELATION  TO  PIECE 
WORK  AND  PREMIUM 

Appendix  III - 457 

THE  EXPENSE  BURDEN  IN  RELATION  TO  BONUS 

Appendix  IV   483 

THE    PLANNING    DEPARTMENT 

Appendix  V  509 

SOME    AXIOMS    OF    ADMINISTRATION 


THE    SCIENCE   AND   PRACTICE    OF 
MANAGEMENT 

BY 

A.  Hamilton  Church 

With  an  Appendix  on  Systems  of  Wage  Payment 
and 
two  folding  diagrams  in  color,  showing  prac- 
tical organization  by  organic  functions 
in  two  types  of  plant 


SCIENCE  AND  PRACTICE   OF 
MANAGEMENT 

Chapter  I 
INTKODUCTOKY 

TN  any  industrial  undertaking  there  are  two 
A  elements  present,  which  though  some- 
times merging  into  each  other,  and  always 
exerting  reciprocal  influence,  are  neverthe- 
less quite  distinct  in  their  essence.  The  first 
of  these  is  the  Determinative  element,  which 
settles  the  manufacturing  policy  of  the  busi- 
ness—what to  make — and  the  distributive 
policy — where  to  sell  and  by  what  means. 
The  second  is  the  Administrative  element, 
which  takes  the  policy  as  determined,  and 
gives  it  practical  expression  in  buying,  mak- 
ing, and  selling. 

Of  these  two  elements,  which  are  not  in- 
frequently combined  in  small  businesses,  the 

1 


2  SCIENCE  AND  PRACTICE  OF  MANAGEMENT 

first  —  the  Determinative  —  represents  the 
higher  and  scarcer  faculty.  The  larger  the 
business  the  more  difficult  will  it  be  to  ob- 
tain men  capable  of  adequately  filling  the 
exacting  demands  for  judgment,  foresight, 
courage,  and  experience  which  decision  on 
large  points  of  policy  sets  up.  The  danger 
in  vast  organizations  commonly  lies  not  in 
any  prospective  failure  on  the  side  of  the 
Administrative  element,  for  in  this  depart- 
ment the  assistance  of  all  kinds  of  experts 
can  be  obtained ;  errors,  moreover,  are  of  less 
vital  consequence,  and  their  results  can  be 
more  quickly  reduced  to  safe  proportions. 
It  is  failure  in  the  Determinative  element 
that  pulls  down  flourishing  businesses.  When 
the  general  of  an  army  blunders,  it  may  eas- 
ily neutralize  the  army's  efficiency  as  a  fight- 
ing unit. 

The  time  has,  perhaps,  not  yet  come  when 
we  may  reduce  the  Determinative  element  to 
a  body  of  principles,  or  even  working  rules. 
It  contains,  today,  too  many  unknown  and 
variable  factors.  This  book,  therefore, 
makes  no  attempt  to  deal  with  this  aspect 
of  industry;  it  covers  the  element  of  Ad- 
ministration alone,  and  only  one  division  of 
administration,  namely,  manufacturing.    The 


INTRODUCTORY  6 

administrative  problems  of  Selling  and  Dis- 
tribution are  excluded  from  consideration  in 
its  pages. 

Some  twenty-years  study  of  the  manu- 
facturing problem  has  necessarily  resulted  in 
modification  of  the  author  's  views  on  the  sub- 
ject at  various  periods,  but  this  study  has 
been  for  a  long  time  accompanied  by  a  grow- 
ing acceptance  of  the  view  that  management, 
or  rather  administration  (eliminating  the  de- 
terminative element),  is  an  organic  affair.  It 
is  this  view  that  will  be  expanded  in  this 
book. 

It  may  be  desirable  to  explain  in  some 
detail  just  what  is  meant  by  the  term  "or- 
ganic". The  analogy  of  the  human  body 
gives  the  simplest  illustration:  the  work  of 
the  great  and  lesser  " organs' '  of  the  body, 
the  heart,  lungs,  brain,  etc.,  is  independent 
yet  co-ordinated.  One  of  these  organs  may 
be  working  at  a  higher  efficiency  than  the 
others,  or  vice  versa,  but  on  the  balanced 
working  of  the  whole  set  depends  the  health 
of  the  man,  and  his  efficiency  for  whatever 
he  wants  to  do — riding,  walking,  writing  a 
poem,  or  dictating  a  business  letter.  Some 
of  these  organs  may  fall  into  a  state  of  in- 
efficiency without  marked  results   being  at 


4  SCIENCE  AND   PRACTICE   OE   MANAGEMENT 

once  visible,  or  again  some  one  of  them  may 
be  permanently  lowered  in  efficiency  with- 
out hindrance  to  particular  kinds  of  work. 
But  with  each  there  is  a  point  beyond  which 
organic  inefficiency  cannot  go  without  dis- 
aster. 

Further,  we  have  the  nervous  system  of 
the  human  body.  This  is,  amongst  other 
things,  the  co-ordinating  mechanism  of  the 
various  organs.  Injury  to  this  is  the  most 
serious  kind  of  disaster.  It  is  also  inter- 
esting to  note  that  the  nervous  system  em- 
braces ganglia  or  subordinate  automatic  lit- 
tle brains,  to  which  are  entrusted  certain 
routine  performances,  so  often  repeated  as  to 
be  unworthy  the  recurrent  attention  of  the 
central  brain  every  time  they  are  put  in  use. 
In  learning  to  ride  a  bicycle,  for  instance, 
the  central  brain  is  at  first  very  actively 
engaged  in  giving  orders  to  the  unwilling 
limbs.  But  as  the  new  motions  are  made 
familiar  by  repetition,  their  ordering  is 
turned  over  to  the  ganglia  concerned  and 
they  become  automatic.  When  mounting  a 
bicycle  in  our  earlier  stages  we  think  about 
our  movements  with  very  close  attention. 
Later,  we  jump  on  and  ride  off,  thinking  the 
while  of  almost  anything  else. 


INTRODUCTORY 


This  process  of  education  of  the  subordi- 
nate ganglia  affords  an  explanation  why  all 
instructors  in  any  kind  of  manual  or  mental 
activity  harp  continually  on  commencing  in 
the  right  way  from  the  first.  If  we  confuse 
the  nervous  system  with  wrong  impressions, 
we  never  succeed  in  entirely  eliminating  the 
necessity  for  more  or  less  attention  of  the 
central  brain  to  what  we  are  doing.  Applied 
to  administrative  problems  this  is  a  parable 
that  will  throw  light  on  unhappy  conditions 
we  have  all  met.  Places  where  the  manage- 
ment is  always  fussing  over  the  mistakes 
of  subordinates  are  places  where  the  sub- 
ordinate ganglia  have  failed  to  acquire 
proper  habit. 

It  is  not  intended  that  this  analogy  should 
be  pushed  too  far,  or  that  an  exact  parallel 
should  be  drawn  between  the  factory  and 
the  body.  The  human  organism  is  a  struc- 
ture vastly  more  complex,  and  has  duties 
far  more  varied,  with  adjustments  far  more 
refined  than  the  largest  industrial  concern. 
Beside  such  an  organism,  the  most  com- 
plex factory  system  is  an  affair  of  almost 
transparent  simplicity,  and  we  might  say, 
coarseness.  But  it  is  from  the  fact  that  the 
human  body  is  the  most  highly  co-ordinated 


6  SCIENCE  AND  PRACTICE   OF  MANAGEMENT 

and  efficient  mechanism  with  which  we  are 
acquainted  that  we  may  expect  to  find  help- 
ful analogies  and  even  practical  hints. 

Thinking  along  these  lines,  the  author's 
attention  was  given  to  determine,  if  possible, 
what  organic  elements  were  to  be  found  in 
industrial  activity.  It  was  tempting,  of 
course,  to  apply  the  idea  to  specific  things, 
to  see  the  heart  in  the  shop  full  of  machin- 
ery, the  liver  in  the  stores  department,  the 
lungs  in  the  power  equipment  and  so  on.  But 
this  was  found  to  lead  nowhere.  The  true 
line  of  advance  was  seen  to  be  in  an  analogy 
with  the  activity  of  organs,  not  with  the  or- 
gans themselves.  And,  of  course,  that  ac- 
tivity is  of  a  totally  different  kind  in  a  fac- 
tory to  anything  in  the  human  body. 

We  do  not  find,  then,  any  close  physiologi- 
cal analogies  between  the  body  and  the  fac- 
tory. What  we  do  find  are  groups  of  activities 
common  to  all  industry,  which  groups  are 
organic;  that  is,  they  perform  specific  func- 
tions in  a  specific  way.  Like  the  organs  of 
the  body,  they  are  independent,  yet  closely 
co-ordinated.  As  in  the  biological  field,  we 
find  instances  where  certain  of  these  organs 
are  purely  rudimentary,  and  yet  quite 
adapted  to  the  wants  of  the  whole.    We  find 


INTRODUCTORY 


also  that  the  efficiency  of  one  organ  is  not 
related  directly  to  the  efficiency  of  another, 
and  only  to  the  efficiency  of  the  whole  in  un- 
equal degrees.  Finally  we  do  find  something 
closely  analogous  to  the  brain,  and  the  ner- 
vous system  with  its  subordinate  ganglia. 

It  may  be  asked  what  is  the  practical  value 
of  reducing  administration  to  a  set  of  organic 
functions*  and  regulative  principles  or  laws! 
To  those  who  demand  an  immediate  cash 
value  for  every  effort  of  thought  and  atten- 
tion, it  may  be  pointed  out  that  this  kind 
of  knowledge  bears  the  same  relation  to  the 
conduct  of  a  successful  business  that  a  knowl- 
edge of  anatomy  does  to  the  successful  prac- 
tice of  a  physician.  In  the  days  when  medical 
men  were  ignorant  of  the  structure  of  the 
body,  of  the  functions  of  its  organs,  and  of 
the  various  physiological  principles  that  con- 


*  It  may  be  desirable  to  point  out  that  the  five  great 
organic  functions  treated  of  in  this  book  have  no  relation 
to  what  is  termed  "functional  foremanship".  It  has  been 
found  that  all  manufacturing  activity  is  functional  in  the 
broadest  sense.  Functional  foremanship  is  merely  a  special 
case  of  the  division  of  effort  applied  to  other  matters 
than  direct  operative  labor  or  "processes''.  The  wide 
interest  excited  by  ' '  functional  foremanship ' '  was  probably 
due  to  the  fact  that  division  of  Effort  had  been  hitherto 
associated  chiefly  with  manual  labor.  "Functional  fore- 
manship ' '  is  applicable  in  some  industries,  but  not  in 
others.  The  organic  functions  are  common  to  all  indus- 
tries. 


©  SCIENCE   AND  PRACTICE   OF   MANAGEMENT 

trol  human  life,  the  practical  art  of  medi- 
cine was  at  a  very  low  ebb.  It  was  com- 
pounded of  guesswork,  quackery,  and  as- 
surance in  about  equal  parts,  and  generally 
amounted  to  the  doing  of  something  at  ran- 
dom with  an  air  of  great  wisdom.  But  withal 
the  patient  frequently  died,  where  modern 
medicine  would  easily  have  restored  him  to 
health; 

It  is  not  only  in  regard  to  increased  con- 
trol over  the  diseases  of  business  that  a 
knowledge  of  the  anatomy  and  physiology 
of  administration  has  immediate  practical 
value.  It  has  equal  value  in  another  direc- 
tion, a  direction  that  has  no  counterpart  in 
medicine;  for  a  physician  never  puts  the 
parts  of  a  human  body  together.  The  busi- 
ness man,  on  the  other  hand,  is  very  fre- 
quently called  on  to  put  the  elements  of  a 
business  together,  or  in  other  words,  to  start 
a  plant.  And  how  many  failures  result  from 
plants  being  started  in  violation  of  every 
principle  of  administration  it  is  not  easy  to 
say,  but  one  may  guess  that  failures  from 
this  cause  are  not  uncommon.  At  any  rate 
many  unhealthy  weeds  result,  that  should 
have  been  vigorous  dividend-bearing  peren- 
nials. 


INTRODUCTORY  \) 

The  immediate,  practical,  value-yielding 
return  from  an  analysis  of  administrative 
functions  may  therefore  be  expected  to  be 
considerable.  If  the  analysis  is  a  happy  one 
it  will  immediately  show  natural  lines  of  de- 
velopment, natural  groupings  of  the  differ- 
ent kinds  of  skill  concerned,  it  will  indicate 
Why  and  When,  and  will  also  throw  light  on 
limitations — how  far,  for  example,  certain  in- 
struments or  tools,  such  as  time  study,  or 
inspection,  should  be  employed ;  and  it  should 
do  this,  not  by  hard  and  fast  rules  culled 
from  some  one  person's  practice  in  one  par- 
ticular plant  or  industry,  and  never  wholly 
applicable  to  other  plants  or  industries,  but 
by  application  of  universal  rules,  in  the 
sense  that  rules  of  arithmetic  are  universal. 


Chapter   II 

THE    TWO    GKEAT    INSTKUMENTS 
OF    MANAGEMENT 

/TAHE  problem  of  management,  broadly 
A  regarded,  consists  in  the  practical  ap- 
plication of  two  great  intellectual  processes. 
Whatever  the  end  aimed  at,  whether  the  con- 
duct of  a  military  campaign  or  the  manu- 
facture of  an  industrial  product,  the  proc- 
esses involved  are  those  of  analysis  and 
synthesis.  In  proportion  as  analysis  is  keen 
and  correct,  and  synthesis  is  sure  and  unerr- 
ing, so  will  be  the  resulting  efficiency.  If  our 
power  of  synthesis  is  less  than  our  power  of 
analysis,  academic  and  theoretical  "  sys- 
tems' '  will  result.  If,  on  the  contrary,  we 
neglect  analysis  and  force  synthesis  without 
having  shrewdly  studied  our  ground,  some, 
and  even  considerable,  practical  success  may 
result,  but  there  will  be  a  great  waste  of 
opportunity  and  failure  to  attain  the  most 
efficient  results. 

The  neglect  of  analysis  and  the  forceful 
use  of  synthesis  are  typical  of  the  success- 

10 


ANALYSIS   AND   SYNTHESIS  11 

ful  businesses  of  the  past.  The  strong, 
shrewd,  ' '  practical ' '  man  could  afford  to  neg- 
lect a  careful  analysis  of  his  problem,  be- 
cause he  had  a  very  large  margin  of  profit 
to  draw  on.  His  wastes  were  great,  his  lost 
opportunities  many,  but  he  knew  nothing 
about  them  and  cared  less,  because  his  opera- 
tions were  successful  in  proportion  to  his 
expectations.  If  his  profits  were  not,  as  we 
can  see  now,  as  large  as  they  should  have 
been,  they  were  at  least  as  large  as  those 
of  everyone  else. 

During  the  last  fifteen  years  there  has  been 
a  considerable  development  of  the  art  of  an- 
alysis in  the  problems  of  management.  The 
early  beginnings  of  this  movement  were 
characterized  by  a  desire  for  more  exact 
knowledge.  It  began  to  be  realized  that 
manufacturing  is,  in  fact,  made  up  of  a  long 
series  of  very  small  steps,  and  that  it  is  de- 
sirable to  ascertain  the  money  value  of  these 
steps,  so  that  comparisons  may  be  made.  In 
this  way  the  movement  towards  cost  account- 
ing began,  and  presently  reached  a  high  state 
of  development. 

The  next  step  on  the  path  of  development 
of  the  practical  use  of  analysis  was  due  to 
the  desire  of  employers  of  labor  to  find  some 


12         SCIENCE   AND  PRACTICE    OF    MANAGEMENT 

satisfactory  basis  for  rewarding  it  according 
to  results.  The  old  piece-work  methods  were 
largely  based  on  the  hit-or-miss  plan.  Some 
more  or  less  experienced  foreman  or  rate- 
setter  came  along  and  looked  at  a  job,  and 
made  what  appeared  to  be  a  guess  (often  a 
very  close  guess)  at  the  time  that  should  be 
taken  to  perform  the  work.  A  rate  was  fixed 
accordingly.  The  introduction  of  the  pre- 
mium plan  with  the  widespread  notice  it  at- 
tracted, emphasized  the  need  for  more  ac- 
curate determination  of  times,  and  as  this 
happened  in  the  machine-shop  industry, 
which  is  of  all  industries  the  most  complex 
and  varied  both  in  its  machines  and  its 
product,  it  was  found  that  some  new  de- 
parture was  needed. 

To  meet  this  need,  the  particular  kind  of 
analysis  now  known  as  "time  study' '  was  re- 
discovered. As  far  as  the  machine  industry 
was  concerned  it  appears  to  have  been  new, 
but  the  idea  is  really  old,  going  back  to  the 
very  beginnings  of  the  factory  system.  The 
principle  of  time  study  is,  in  essence,  the  an- 
alysis of  something  into  its  elements,  and 
observation  of  the  times  taken  by  a  skilful 
operator  to  perform  these  elements.  By  add- 
ing the  times  together,  it  is  possible  to  get 


ANALYSIS   AND   SYNTHESIS  13 

a  very  close  approximation  to  what  may 
reasonably  be  considered  the  standard  time 
for  the  whole  job. 

This,  of  course,  is  merely  doing  systemati- 
cally, and  in  an  exact  way,  what  the  fore- 
man or  rate-setter  did  mentally  and  by  the 
aid  of  his  experience.  Such  a  man  did  not 
really  guess  at  the  proper  time.  He  rapidly 
ran  over  in  his  mind  the  successive  steps  to 
be  taken,  and  pictured  them  to  himself,  allot- 
ting the  proper  time  to  each,  and  thus  ar- 
rived at  a  result.  The  difference  between 
his  work  and  that  of  a  time-study  man  was, 
chiefly,  that  he  gave  the  answer  but  did  not 
disclose  the  workings.  The  latter  records 
every  detail  of  the  way  in  which  he  arrives 
at  the  result,  with  the  obvious  advantage  that 
criticisms  and  corrections  may  be  made,  and 
even  the  details  themselves  may  be  of  im- 
portance for  future  reference. 

To  understand  what  it  is  that  time  study, 
as  an  instrument  of  analysis,  really  does, 
we  may  suppose  that  a  man  undertakes  an 
odd  kind  of  journey  for  a  bet.  He  under- 
takes to  run  three  miles,  walk  five,  swim  half- 
a-mile,  ride  a  bicycle  two,  crawl  one,  and 
hop  half-a-mile,  finally  ending  up  by  taking 
an  aeroplane  and  flying  six  miles.     And  he 


14         SCIENCE   AND  PRACTICE    OF   MANAGEMENT 

undertakes  to  do  all  this  within  a  given  time. 
Now  to  look  at  the  problem  as  a  simple  mat- 
ter of  travelling  eighteen  miles  will  not  give 
us  a  good  idea  of  the  possible  time  it  will 
take.  If  we  are  to  make  a  wager  with  him — 
if,  for  instance,  we  are  to  give  him  fifty 
dollars  if  he  completes  the  journey  within 
a  certain  limit  of  time — it  is  obvious  that 
we  shall  be  in  a  very  unsafe  position  if  we 
do  not  carefully  analyze  each  of  the  different 
kinds  of  progression  that  he  has  to  make,  and 
reckon  up  his  probable  speed  as  regards  each. 

If,  on  the  other  hand,  we  make  a  list  of  the 
different  kinds  of  movement  he  has  to  make, 
and  apply  our  experience  to  assess  his  pos- 
sible speed  in  each  kind,  and  then  aggregate 
the  items,  we  shall  be  fairly  close  toau  sport- 
ing chance".  But  if  we  happen  to  have  at 
hand  trustworthy  data  of  record  speeds  in 
each  of  these  different  kinds  of  movements, 
then  we  shall  be  able  to  make  a  very  close 
wager,  and  it  will  depend  on  the  man  himself 
whether  he  rises  to  the  occasion  or  not. 

Time  study,  as  applied  to  jobs,  works  ex- 
actly in  this  way.  It  applies  itself  to  dis- 
cover, first,  exactly  what  different  kinds  of 
work  are  involved  in  the  production  of  a 
piece.     Then  it  proceeds  to  observe  and  re- 


ANALYSIS   AND  SYNTHESIS  15 

cord,  step  by  step,  the  exact  time  taken  to 
perform  each  of  these  different  kinds  of 
work.  Some  of  these  times  may  be  refer- 
able to  standards  already  known,  and  some 
not,  but  in  any  case  the  aggregate  of  the 
different  kinds  of  work  as  expressed  in  min- 
utes or  seconds  gives  a  close  approximation 
to  a  correct  time,  on  which  we  can  base  our 
offer  to  the  man.  The  analysis  of  work  by 
means  of  time  study  is  in  many  cases  very 
valuable,  but  like  all  intellectual  instruments 
its  employment  can  be  overdone,  if  it  is 
erected  into  an  end  in  itself. 

The  observations  made  by  time  study  very 
soon  disclosed  the  fact  that  great  in- 
efficiencies existed  in  and  between  these  vari- 
ous kinds  of  work  which  are  involved  in  pro- 
duction of  a  given  piece.  To  employ  another 
analogy,  we  may  regard  time  study  as  a  mi- 
croscope which  is  applied  to  ascertain  the 
structure  of  a  unit  process  which  has  here- 
tofore been  regarded  as  a  whole,  indivisible 
thing.  When  the  unit  productive  process  was 
subjected  to  the  lenses  of  the  time-study 
microscope  it  was  found  to  be  full  of  faults. 
Instead  of  being  a  smooth,  homogeneous  pro- 
gression from  beginning  to  end,  it  was  found 
to  consist  of  knots  and  burrs,  rough  surfaces, 


16        SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

impulses  starting  here  and  reaching  nowhere, 
efforts  begun  and  broken  off  without  effect- 
ing anything,  and  generally  to  be  different 
from  what  everyone  thought  it  to  be. 

From  time  study  to  motion  study  (itself 
also  a  method  of  analysis  reaching  back  to 
the  early  beginnings  of  the  use  of  machin- 
ery) is  a  natural  step.  Having  ascertained 
that  unit  processes  are  in  fact  made  up  of  a 
series  of  steps,  and  having  recorded  these 
steps  and  allotted  times  to  them,  it  was  a 
natural  development  to  apply  criticism  to 
the  steps  themselves.  Why  should  this  be 
done,  and  why  that?  Why  should  the  man 
bend  down  to  pick  up  the  material  rather 
than  the  material  be  lifted  up  to  the  man? 
Why?  indeed!  The  moment  questions  of 
this  kind  got  into  the  air,  it  very  soon  be- 
came thick  with  them.  The  work  of  Mr.  Gil- 
breth  on  motion  study  must  be  regarded  as 
the  most  original  contribution  to  the  science 
of  management  that  has  yet  been  made. 

So  far  we  have  been  considering  the  in- 
strument of  analysis  as  applied  to  the  in- 
dividual piece  or  component,  or  to  use  a 
convenient  but  unbeautiful  word,  to  the  job. 
Once,  however,  that  analysis  set  out  on  its 
career,  its  sphere  of  action  steadily  widened. 


ANALYSIS   AND   SYNTHESIS  17 

Just  as  the  job  is  made  up  of  small  steps 
which  it  was  the  work  of  time  study  to  an- 
alyze and  tabulate  with  time  as  an  element, 
so  the  aggregation  of  many  jobs,  that  is  the 
product  in  abstract,  passes  through  a  number 
of  stages  which  are  also  possible  of  analysis. 
Just  as  in  operating  on  the  job  we  may  do 
this  before  that,  and  then  find  that  we  have 
to  turn  back  to  rectify  some  omission,  so  in 
creating  a  stream  of  product  through  the 
plant  it  is  quite  easy  to  have  it  cross  and  re- 
cross,  turn  back  on  its  tracks,  make  sudden 
lunges  in  this  direction  and  in  that,  now 
hurry  forward  and  now  move  sluggishly, 
sometimes  accumulate  in  masses,  and  some- 
times be  absent  where  its  presence  is  needed 
— all  these  troubles  may  exist  without  any- 
one being  alive  to  them  or  at  least  to  their  ex- 
tent and  importance,  until  the  instrument  of 
analysis  is  applied  to  the  problem. 

The  routing  of  product  and  the  lay-out  of 
machines  is,  then,  a  further  development  of 
the  instrument  of  analysis  that  has  very  im- 
portant bearing  on  efficiency.  It  is  of  course 
nothing  novel.  New  plants  have  always  given 
some  attention  to  the  matter.  But  its  exact 
study,  its  investigation  by  charts  and  dia- 
grams, the  adaptation  of  buildings  to  special 


18        SCIENCE   AND  PEACTICE    OE    MANAGEMENT 

agreement  with  their  uses,  the  careful 
scrutiny  of  methods  of  transporting  product 
within  the  plant — all  these  are  very  modern 
applications  of  the  instrument  of  analysis, 
which  are  having  important  economic  re- 
sults. 

Lay-out  of  machines  and  its  influence  on 
the  routing  of  product  is,  however,  a  matter 
of  providing  conditions.  We  have  still  a 
large  field  left  for  the  exercise  of  the  analyti- 
cal faculty  in  regard  to  the  daily  and  hourly 
movement  of  product.  Product  does  not 
move  by  itself  in  the  majority  of  industries. 
Even  in  "  continuous ' '  industries  there  are 
places  and  times  when  human  agency  must  be 
relied  on,  but  in  mechanical  industries  pro- 
duct is  absolutely  inert.  It  has  to  be  moved. 
Moreover,  not  only  has  the  product  to  be 
moved,  but  in  a  large  class  of  cases  when 
it  is  brought  face  to  face  with  the  appro- 
priate man  and  machine,  it  cannot  be  worked 
on  until  specific  instructions  are  received  as 
to  what  is  to  be  done  to  it.  All  industries 
are  not  situated  thus,  but  most  machine-shop 
industries  are — drawings  and  instructions 
are  as  necessary  as  the  material  itself. 

It  is  evident  that  all  this  activity — the 
separate  kinds  of  effort  involved  in  acquir- 


ANALYSIS   AND   SYNTHESIS  19 

ing  material,  bringing  it  into  storage,  moving 
it  from  place  to  place  at  the  right  moment, 
providing  drawings  and  instructions,  com- 
municating them  to  the  persons  concerned, 
testing  the  product,  and  getting  it  out  of  the 
plant  by  a  given  date — involves  a  large  num- 
ber of  steps,  in  any  of  which  considerable  in- 
efficiency may  exist  without  any  more  notice- 
able result  than  a  general  sluggishness  of 
working,  which  in  its  turn  may  have  come  to 
be  regarded  as  the  natural  condition  in  the 
plant.  It  is  obvious,  therefore,  that  here  is 
a  field  for  the  instrument  of  analysis  in  which 
important  laurels  may  be  expected  to  be 
gathered. 

The  modern  name  for  the  organization 
which  is,  or  should  be,  built  up  on  a  thorough 
analysis  of  the  different  activities  concerned 
in  the  movements  of  material  and  instruc- 
tions, varies  according  to  the  fancy  of  the 
user.  By  some  it  is  called  ' '  planning, ' '  by 
others  " despatching,"  but  by  whatever  name 
it  is  known  it  has  always  been  in  existence  in 
all  plants  from  the  beginnings  of  the  factory 
system,  for  the  simple  reason  that  business 
could  not  be  done  without  it.  The  only  differ- 
ence between  modern  types  of  planning  and 
the  older  practice  is  that,  today,  it  is  recog- 


20        SCIENCE  AND  PRACTICE   OF   MANAGEMENT 

nized  as  a  subject  of  analysis,  and  that  the 
planning  department,  or  by  whatever  name  it 
is  known,  is  not  merely  a  haphazard  out- 
growth of  the  business,  but  is  organized  after 
a  careful  analysis  of  the  needs  of  the  plant, 
with  special  reference  to  the  kind,  urgency, 
and  aim  of  the  operations  carried  on. 

The  important  point  in  the  arrangement  of 
a  planning  department  is  not  the  adoption  of 
any  particular  variety  of  organization  in 
it,  for  such  varieties  are  as  many  as  there 
are  separate  industries,  and  even  in  the  same 
industry  there  is  probably  no  part  of  the 
system  which  needs  such  careful  individual 
adaptation  to  the  particular  plant  as  the  plan- 
ning department.  The  really  important  point 
is  the  correct  and  exhaustive  application  of 
analysis  to  the  actual  facts  of  the  case,  that 
is,  to  the  nature  of  the  product,  of  the  ma- 
chines, of  the  men,  and  of  the  officials.  Only 
when  these  facts  are  exhaustively  known, 
may  the  design  of  a  planning  department 
commence. 

In  the  foregoing  paragraphs  we  have  con- 
sidered the  principal  applications  of  the  in- 
strument of  analysis  as  found  in  modern  in- 
dustrial management.  Whatever  progress 
has  been  made  in  the  past  decade  or  two  is 


ANALYSIS   AND   SYNTHESIS  21 

due  principally  to  the  revival  of  this  impor- 
tant instrument  and  its  application  to  some 
of  the  most  pressing  problems  of  manage- 
ment. But  there  is  one  thing  that  must  not 
be  overlooked.  Analysis  is  not  a  construct- 
ive instrument.  We  can  make  nothing  by  its 
aid.  It  distinguishes,  it  provides  very  accur- 
ate knowledge,  it  eliminates,  but  it  does  not 
build.    That  is  the  task  of  synthesis. 

Important  practical  matters  hang  upon 
this  very  vital  distinction.  The  modern  move- 
ment toward  betterment  has  had  a  some- 
what chequered  history.  We  have  heard  of 
successes,  but  we  have  also  heard  of  failures. 
Why  is  this  1  If  new  and  improved  methods 
are  to  be  had,  there  should  be  no  failures. 
That  they  have  happened  would  seem  to  show 
that  the  new  methods,  so  far  from  being 
based  on  the  rock  of  science,  are  to  some 
extent  empirical  themselves,  like  the  methods 
they  seek  to  displace.  Even  so,  they  may  be 
a  distinct  gain,  because  they  may  be  much 
less  empirical — the  hits  may  be  vastly  more 
numerous  than  the  misses. 

Personally  I  have  sufficient  confidence  in 
the  progress  that  has  been  secured  to  affirm 
that  there  should  have  been  no  failures,  and 
if  there  have  been  such,  it  has  been  due  to  a 


22         SCIENCE   AND  PRACTICE    OP   MANAGEMENT 

want  of  perception  as  to  the  real  place  of 
these  new  developments  of  analysis  in  the 
sum-total  of  management.  It  is  the  unfor- 
tunate proclivity  of  inventors  to  magnify 
their  inventions,  to  look  with  dismay  on  any 
attempt  to  vary  and  adapt  them,  and  espe- 
cially to  declare  that  they  are  incapable  of 
improvement  in  any  sense  whatever.  Now 
most  of  the  new  methods  that  have  attracted 
public  attention  in  recent  years  have  been 
applications  of  analysis.  And  with  most  of 
them,  their  sponsors,  perhaps  unconsciously 
perceiving  that  analysis  was  not  a  construct- 
ive instrument,  have  welded  their  grain  of 
truth  into  an  overwhelming  mass  of  "  sys- 
tem ",  much  of  it  entirely  superfluous  and 
arbitrary,  and  none  of  it  applicable  to  in- 
dustry at  large,  but  only  to  some  extent  to  a 
particular  industry. 

The  failures  that  have  happened  have  not 
been  due  to  applying  the  grain  of  truth, 
but  to  applying  the  arbitrary  combination 
forming  the  "system"  to  uses  for  which  it 
had  not  the  least  applicability.  To  try  to 
run  a  shoe  factory  like  a  steel  works,  or  a 
chemical  industry  like  a  machine  shop,  is 
foolish  and  bound  to  fail,  not  because  the  in- 
strument of  analysis  is  not  just  as  useful 


ANALYSIS   AND   SYNTHESIS  23 

in  one  as  in  the  other  but  because  the  syn- 
thesis of  these  different  kinds  of  industry  is 
wholly  diverse. 

"What  then  is  synthesis  1  What  kind  of  ac- 
tivities are  grouped  under  that  head!  In 
what  does  it  differ  from  analysis,  and  in  what 
practical  ways  is  it  applied?  These  are  in- 
teresting questions  and  will  be  briefly  dis- 
cussed. 

Just  as  analysis  is  the  art  of  separating 
and  dissecting,  so  synthesis  is  the  art  of  com- 
bining. As  a  practical  art  it  naturally  pre- 
cedes analysis,  or  more  correctly  it  precedes 
conscious  analysis.  While  the  elements  of  a 
problem  are  simple,  the  mind,  intent  on  its 
aim,  analyzes  unconsciously  to  a  degree  suffi- 
cient for  its  needs.  But  in  proportion  as 
the  number  of  elements  grows — and  in  mod- 
ern industry  they  have  grown  to  a  very  large 
number — then  conscious  analysis  must  be 
brought  into  play,  not  to  supersede  but  to 
supplement  the  operations  of  synthesis, 

The  art  of  management  up  to  a  few  years 
ago  was  wholly  carried  on  by  synthetical 
methods.  In  the  industrial  sense,  synthesis 
is  the  combination  of  the  faculties  of  men — 
that  is,  their  capacities  to  do  work  of  vari- 
ous kinds,  with  material — that  is,  with  some 


24        SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

object  on  which  different  kinds  of  work  conld 
be  performed.  Nothing  whatever  of  the  ne- 
cessity for  employing  the  synthetical  method 
has  been  removed  or  superseded  by  the  in- 
troduction of  analysis.  The  old  management 
has  not  been  improved  out  of  existence.  It 
has  not  been  even  diminished  in  importance. 
It  has  only  been  given  a  new  tool  or  instru- 
ment— an  instrument  of  study,  a  microscope, 
something  by  which  the  true  inwardness  of 
problems  may  be  searched  out,  instead  of 
having  to  rely  on  their  surface  appearance 
and  their  face  value.  The  old  problems  of 
management  still  remain  problems,  still  re- 
quire synthetical  solution,  but  the  chances  of 
their  correct  solution  are  greatly  aided  by 
the  modern  uses  of  analysis. 

The  main  distinction  between  synthesis  and 
analysis  in  this  connection  is  that  synthesis 
is  concerned  with  fashioning  means  to  effect 
large  ends,  and  analysis  is  concerned  with  the 
correct  local  use  of  given  means.  The  view 
taken  by  synthesis  is  a  wide  and  compre- 
hensive one;  it  surveys  the  whole  field  of 
action;  its  great  task  is  to  determine  "what 
to  do".  The  view  taken  by  analysis,  on  the 
other  hand,  is  a  narrow  and  limited  one ;  it 
concerns  itself  with  the  infinitely  small.    Its 


ANALYSIS   AND   SYNTHESIS  25 

task  is  to  say  "how  to  use  certain  means 
to  the  best  advantage ' \  Analysis  builds  up 
from  the  deeps,  as  the  coral  plant  builds  up 
to  the  surface  of  the  ocean,  not  knowing 
whether  it  will  come  out  in  the  midst  of  a 
navigable  strait  or  in  a  backwater  or  bay. 
It  does  not  concern  itself,  for  it  does  not 
have  to,  with  the  ultimate  fate  of  its  work. 
It  may  work  laboriously  today  on  some  prob- 
lem, which  tomorrow  the  necessities  of  syn- 
thesis may  sweep  out  of  existence.  It  will 
as  cheerfully  make  a  time  study  of  a  job  that 
is  never  to  be  repeated,  as  of  a  job  that  is  to 
be  repeated  every  day  for  a  dozen  years. 
But  the  synthetical  side  of  management  de- 
mands that  every  effort  of  analysis,  like 
every  other  effort  made  in  the  plant,  shall 
have  some  proportion,  some  definite  economic 
relation  to  the  purpose  for  which  the  busi- 
ness is  being  run. 

The  method  of  synthesis  is  to  combine 
functions,  that  is,  specific  kinds  of  aim,  in 
such  a  way  that  their  co-operation  produces 
some  distinct  and  useful  result.  It  is  im- 
portant to  notice  that  industrial  synthesis 
is  not  a  mere  combination  of  men,  it  is  a 
combination  of  grouped  activities  or  func- 
tions.   It  sets  up  a  group  of  activities  here, 


26        SCIENCE   AND  PRACTICE    OF   MANAGEMENT 

such,  as  a  power  plant,  and  another  there, 
such  as  a  power-press  shop,  and  even  though 
a  man  may  be  working  today  as  a  stoker  and 
the  next  as  a  machine  tender,  it  is  not  only 
the  man  that  has  been  transferred, — the  di- 
rection of  his  activities  has  been  changed 
also.  To  paraphrase  a  famous  saying,  we 
may  assert  that  "men  may  come  and  men 
may  go,  but  the  function  goes  on  for  ever". 
It  is  evident  therefore  that  the  study  of  func- 
tions is  of  the  greatest  importance.  But 
functions  are  a  product  of  synthesis — an- 
alysis would  never  organize  them  nor  co- 
ordinate them. 

Not  only  industry  but  all  organized  effort 
is  functional.  By  this  is  meant  that  what 
we  really  do  in  organizing  a  number  of  men 
to  attain  a  given  end,  is  to  group  them  under 
certain  kinds  of  activities.  Thus  an  army 
has  its  fighting  force,  its  transport  corps,  its 
recruiting  force,  its  medical  corps,  its  gen- 
eral staff,  and  so  forth.  Each  of  these  is 
made  up  of  numbers  of  men,  but  their  func- 
tions are  quite  different.  The  fighting  force 
fights,  but  does  not  tend  the  wounded;  its 
medical  corps,  on  the  other  hand,  never  takes 
any  part  in  the  fighting;  the  general  staff 
directs  the  policy  of  the  campaign,  but  does 


ANALYSIS   AND   SYNTHESIS  27 

not  mingle  in  the  battle.  An  army,  in  fact, 
is  a  combination  of  functions,  quite  distinct 
from  each  other,  which  are  never  confused 
or  mixed  together.  Even  though  on  occasion 
a  man  is  transferred  from  one  to  another  of 
these  organic  functional  groupings,  the 
nature  of  his  activities  is  changed  at  the 
same  time. 

All  these  different  groups  are  syntheses; 
that  is,  they  are  combinations  for  a  particu- 
lar purpose.  Within  each  there  are  smaller 
groupings;  thus  the  fighting  force  is  made 
up  of  infantry,  cavalry,  artillery,  airship 
corps,  engineers,  and  so  forth.  And  finally 
at  the  bottom  we  have  the  private  soldier, 
or  enlisted  man,  capable  of  doing  only  a  few 
things,  but  of  doing  these  with  reliability  and 
precision.  Beginning  analytically  we  should 
start  with  the  fighting  man  as  the  unit.  We 
should  study  him,  his  arms,  training,  and 
the  variety  of  things  he  can  do  in  a  military 
sense.  But  in  beginning  synthetically  we 
should  not  take  this  point  of  view.  We  should 
first  ask  what  was  the  objective  of  the  whole 
organization.  We  should  ascertain  that  it 
was  war,  and  then  what  kind  of  war.  At 
home  or  abroad?  In  fiat  or  mountainous 
country?     Near  the  base  or  far  away  from 


28        SCIENCE  AND  PRACTICE    OE   MANAGEMENT 

it?    In  short,  we  should  begin,  not  by  study- 
ing means,  bnt  by  studying  ends  or  aims. 

Thereafter  we  should  proceed  by  erecting 
groupings  successively  less  and  less  com- 
prehensive. Having  arrived  at  the  idea  of 
an  army,  we  should  next  consider  its  great 
functional  divisions,  and  the  proportion  they 
should  bear  to  each  other.  We  should  see 
that  righting,  transport,  medical,  and  other 
functions  must  be  provided  for,  and  further 
considering  the  first,  that  the  fighting  force 
must  have  such  and  such  proportions  of  cav- 
alry and  artillery  to  its  infantry.  In  this 
way  we  should  study  the  problem  from  the 
point  of  view  of  providing  certain  functional 
means  to  arrive  at  a  given  end,  and  it  will 
be  evident  that  this  point  of  view  has  very 
little  in  common  with  the  analysis  that  deals 
with  minute  adaptations  of  existing  methods 
to  a  small,  definite,  and  near-by  objective. 

In  a  manufacturing  industry,  according  to 
the  writer's  examination  of  the  subject,  the 
objective  of  the  whole,  namely,  production, 
is  realized  by  a  synthesis  of  five  organic 
functions,  which  are  invariably  present  in 
every  type  of  industry,  but  to  very  different 
extent  in  each,  just  as  an  army  may  require 
a  great  development  of  transport  or  it  may 


ANALYSIS   AND   SYNTHESIS  29 

not.  These  frve  Organic  Functions  are  De- 
sign, Equipment,  Control,  Comparison,  and 
Operation. 

No  form  of  activity  exists  in  a  manufac- 
turing plant  for  the  purposes  of  production 
that  does  not  come  under  one  or  other  of 
these  functional  divisions.  Consequently  we 
can  say  that  production  is  a  synthesis  of 
Design,  Equipment,  Control,  Comparison, 
and  Operation. 

Taking  the  first  of  these  Organic  Func- 
tions into  consideration — that  of  Design — it 
will  be  obvious  that  this  must  exist  in  every 
industry,  but  in  very  different  degree  of  de- 
velopment in  some  compared  with  others.  In 
a  chemical  industry,  for  example,  it  exists 
in  a  very  elementary  form,  that  of  a  mere 
formula  of  mixture.  In  an  electric  manufac- 
turing or  a  heavy  engineering  plant,  on  the 
other  hand,  it  exists  in  the  most  highly  de- 
veloped state;  it  demands  an  elaborate 
equipment,  a  large  staff,  a  collection  of  ex- 
perts, a  close  and  continuous  touch  with 
every  detail  of  life  in  the  shops.  But  the 
important  point  is  that  both  the  elementary 
and  the  highly  developed  condition  in  which 
we  find  this  function  have  exactly  the  same 
end  and  aim,  namely,  that  of  prescribing  in 


30        SCIENCE   AND  PRACTICE    OE   MANAGEMENT 

advance  the  changes  which  shall  successively 
take  place  in  material. 

Again,  the  nature  of  the  Equipment,  and 
the  method  of  its  employment,  may  be  en- 
tirely different  in  a  paper  mill,  a  foundry, 
and  a  soap  factory ;  but  yet  each  must  have 
equipment,  and  in  each  certain  laws  as  to 
the  use  of  such  equipment  must  be  observed 
in  the  same  way.  In  each  there  will  be  a  lay- 
out more  efficient  than  any  other,  in  each 
there  will  be  decay  and  replacement  of  equip- 
ment, depreciation,  maintenance  and  repair, 
etc.,  quite  irrespective  of  the  kind  of  equip- 
ment or  its  uses.  On  the  other  hand,  the 
lay-out  of  equipment  will  be  much  more  im- 
portant in  some  industries  than  in  others. 
Product  that  can  be  pumped  through  pipes, 
or  conveyed  on  endless  bands,  is  much  more 
independent  of  physical  lay-out  than  one 
which  demands  great  effort  to  move  it  even 
a  short  distance.  Every  variety  of  equip- 
ment will  have  its  own  problems,  but  a  large 
number  of  these  problems  are  common;  that 
is,  they  differ  in  degree  and  not  in  kind.  But 
in  no  case  is  equipment  absent  altogether. 

The  function  of  Control  is  also  obviously 
common  to  all  manufacturing  plants. 
Broadlv   stated    it   is    the   function    of   the 


ANALYSIS   AND   SYNTHESIS  31 

"boss".  But  as  the  boss  cannot  subdivide 
himself,  and  cannot  attend  to  all  the  mat- 
ters necessitating  control,  this  function  re- 
quires more  or  less  development  according 
to  the  industry.  In  some,  such  as  continu- 
ous industries  where  product  is  subject  to 
a  fixed  and  unvarying  sequence  of  manipu- 
lations wholly  conditioned  by  the  nature  of 
the  machinery  employed,  control  does  not 
need  great  elaboration.  In  other  industries, 
such  as  engineering  manufacture,  the  multi- 
plicity of  processes  and  parts,  the  necessity 
of  storing,  handling,  and  moving  innumer- 
able articles  of  product,  the  importance  of 
taking  care  of  the  element  of  delay,  the  ne- 
cessity to  co-ordinate  instructions  and  ma- 
terial so  that  one  does  not  have  to  wait  for 
another,  means  a  high  degree  of  elaboration 
of  the  function  of  control,  and  it  is  conse- 
quently this  function  that  commonly  gets 
over-organized  and  smothered  under  folds  of 
red  tape.  But  no  industry  exists  in  which 
control  does  not  need  intelligent  organization 
on  its  own  merits. 

Similarly,  there  is  no  industry  in  which 
the  function  of  Comparison  does  not  exist. 
In  "continuous"  industries,  where  what  is 
being  done  today  at  twelve  o'clock  will  be 


32         SCIENCE   AND  PEACTICE    OF   MANAGEMENT 

clone  tomorrow  at  the  same  hour,  comparison 
is  at  its  lowest  development,  though  even 
here  there  are  often  analyses  to  make,  tem- 
peratures to  watch,  operatives'  attendance  to 
check  and  so  forth.  For  comparison  deals 
with  the  record  of  quantities  whether  such 
quantities  are  expressed  in  time,  money,  de- 
grees, levels,  or  other  notation.  It  therefore 
includes  testing,  inspecting  and  cost  account- 
ing. Any  data  which  are  of  significance  at 
all,  are  only  so  by  comparison.  This  com- 
parison may  be  with  previous  or  future  work 
of  the  same  kind,  or  it  may  be  with  stand- 
ards. And  such  standards,  again,  may  be 
specified  standards  set  up  by  Design,  such  as 
limits,  fits  or  dimensions,  or  may  be  compari- 
sons between  time  allowed  for  a  job,  and 
time  taken,  or  may  deal  with  physical  stand- 
ards such  as  temperatures,  pressures,  de- 
grees of  vacuum,  specific  gravity  and  so 
forth.  But  all  these  cases  postulate  two 
things:  (1)  the  observation  and  record;  (2) 
something  by  which  to  judge  the  value  of 
the  observation  and  record.  No  industry  is 
without  need  for  some  of  these  methods  of 
comparison,  while  in  many  industries  a  very 
considerable  development  of  the  function  is 
both  proper  and  profitable. 


ANALYSIS   AND   SYNTHESIS  33 

The  final  Organic  Function  found  in  manu- 
facturing is  that  of  Operation.  This  com- 
prises the  exercise  of  manual  skills,  trades, 
and  callings,  usually  by  way  of  operating- 
machines,  but  not  necessarily  so.  Just  as 
the  prime  organic  function  of  an  army  is  the 
fighting  corps,  so  the  prime  organic  function 
of  a  plant  is  that  of  Operation.  Just  as 
a  transport  corps  will  not  win  battles,  though 
it  may  lose  them ;  so  the  organic  functions 
of  Design,  Equipment,  Control  and  Compari- 
son will  not  make  an  ounce  of  product,  how- 
ever well  arranged,  though  if  badly  arranged 
they  may  lose  the  battle  of  competition  very 
easily  indeed.  Operation  is  definable  as  the 
act  of  changing  the  status  (that  is,  the  form, 
dimension,  or  composition)  of  material  in 
accordance  with  the  specification  of  Design. 
In  practical  language  it  is  the  work  of  the 
shops,  but  only  the  operative  work  of  the 
shops.  It  does  not  include  foremanship, 
which  is  part  of  Control;  or  inspection, 
which  is  part  of  Comparison.  It  goes  with- 
out saying  that  Operation  is  a  function  pres- 
ent in  every  plant  of  every  kind. 

Having  thus  briefly  reviewed  the  organic 
functions  of  manufacturing,  we  may  revert 
to  the  question  of  synthesis  versus  analysis. 


34         SCIENCE   AND  PRACTICE    OF    MANAGEMENT 

From  what  has  been  said  about  the  latter 
in  the  first  section  of  this  article,  it  will  be 
seen  that  the  instrument  of  analysis  does  not 
either  help  us  to  perceive  the  existence  of 
these  organic  functions  or  tell  us  how  to 
combine  them  so  as  to  give  rise  to  product. 
But  when  they  have  been  recognized,  the 
place  of  analysis  is  very  clearly  seen  in  re- 
lation to  them.  It  is,  in  fact,  an  instrument 
employed  by  all  of  them  to  resolve  their  pe- 
culiar problems.  "It  is  synthesis,  however, 
that  teaches  us  to  combine  them,  and  there- 
fore gives  primary  rise  to  results. 

Industrial  synthesis  may  be  defined  as  the 
proportioning  of  means  to  ends.  Analysis, 
in  the  same  sense,  is  the  study  of  the  adroit 
use  of  certain  specified  means  in  the  most 
efficient  way.  The  difference  is  that  in  an- 
alysis we  assume  the  means  are  as  they  are. 
In  synthesis  it  is  the  choice,  the  relative 
effectiveness,  the  right  proportion,  the  right 
kind  of  means  that  is  in  question.  Synthesis 
is  the  physical,  analysis  the  miscroscopical 
examination  of  the  problem.  Synthesis 
chooses  and  combines,  analysis  discusses  and 
reveals.  It  is  evident  that  we  are  here  in 
presence  of  two  processes  that  need  to  com- 
plement each  other. 


ANALYSIS   AND   SYNTHESIS  35 

The  art  of  managing  an  industrial  plant 
so  as  to  effect  production  most  efficiently 
must  be  recognized  therefore  as  consisting 
of  two  parts.  First,  the  right  use  of  syn- 
thesis— determination  of  the  kind  of  organic 
functions  needed  to  be  set  up,  their  due  pro- 
portion, their  proper  balance,  and  their  in- 
ternal organization;  and  secondly,  the  right 
use  of  analysis— the  investigation  of  the  mi- 
nute steps,  the  small  stages  by  which  product 
advances  from  stage  to  stage  from  the  status 
of  raw  material  to  the  status  of  finished 
goods.  Of  these  two  parts,  the  correct  use 
of  synthesis  is  by  far  the  most  important, 
as  will  be  understood  when  it  is  realized  that 
the  systematic  use  of  analysis  is  only  now 
being  introduced  into  industry.  All  the  not 
inconsiderable  triumphs  of  industry  in  the 
past  were  realized  with  a  trifling  use  of  anal- 
ysis, and  that  mostly  instinctive  and  uncon- 
scious. 

To  sum  up,  we  may  say  that  the  science 
of  management  has  undergone  no  revolution, 
but  it  is  in  the  position  of  having  acquired 
a  powerful  new  instrument  of  research  into 
its  problems,  namely,  systematic  analysis. 
On  the  other  hand,  the  need  of  correct  pro- 
portioning and  adjustment  of  its  functional 


36        SCIENCE  AND  PRACTICE   OF   MANAGEMENT 

activities  today  is  no  less,  and  perhaps  is 
greater,  than  it  ever  was.  To  suppose  that 
analysis  is  a  method  of  management  instead 
of  an  instrnment  of  management  is  a  fatal 
error,  that  has  been  becoming  rather  com- 
mon of  late.  It  seems  desirable  therefore 
to  emphasize  its  dne  place,  and  to  recall  the 
fact  that  the  results  of  synthesis  remain 
those  by  which  management  will  be  finally 
judged  in  all  cases. 


Chapter  III 

THE    ORGANIC    FUNCTIONS    OF    ADMINIS- 
TRATION 

T?  VEEY  administrative  act  arises  from  an 
*^  aim  or  desire  to  do  something.  Exam- 
ination shows  ns  that  five  separate  varieties 
of  aim  are  distinguishable  in  manufactur- 
ing administrative  work,  and  that  this  an- 
alysis is  exhaustive,  i.  e.,  no  aim  or  end  exists 
in  manufacturing  that  cannot  properly  be  as- 
signed to  one  of  these  categories. 

Each  of  these  separate  aims  should  have, 
normally,  its  own  separate  organization  for 
bringing  about  the  results  it  seeks,  and  each 
may  therefore  be  regarded  as  a  true  type  of 
Organic  Function.  These  functions  have  al- 
ready been  enumerated  as  follows  : — 

1.  Design,  which  originates. 

2.  Equipment,  which  provides  physical 
conditions. 

3.  Control,  which  specifies  duties,  and 
which  orders. 

4.  Comparison,  which  measures,  records 
and  compares. 

37 


38        SCIENCE   AND   PRACTICE    OF   MANAGEMENT 

5.  Operation,  which  makes. 

These  organic  elements  of  administration 
are  specific  functions  and  not  things.  They 
are  elemental  facts;  not  tangible  entities, 
but  facts  of  observation.  Thus  they  imply 
different  kinds  of  mental  activity.  The  art 
of  organization  consists  in  entrusting  these 
different  kinds  of  mental  activity  to  the  right 
persons,  and  in  supervising  their  co-ordina- 
tion. It  is  very  important,  therefore,  that 
the  scope  and  limits  of  each  function  shall 
be  as  sharply  defined  as  possible. 

The  object  of  this  classification  is  not  to 
provide  a  mere  nomenclature.  On  the  con- 
trary, if  our  analysis  is  really  correct  and 
exhaustive,  it  becomes  indicative  of  lines  that 
must  be  followed  rigorously,  if  we  desire  to 
have  a  thoroughly  efficient  organization.  It 
should,  however,  be  clearly  grasped  at  the 
outset  that  these  organic  functions  are  those 
of  manufacturing  administration  only.  They 
do  not  apply  to  the  erection  of  a  bridge, 
or  the  management  of  a  railroad,  or  to  com- 
mercial operations  such  as  selling  and 
finance.  They  apply  to  the  routine  activity 
of  a  manufacturing  plant  in  regard  to  its 
internal  affairs  only.  Other  kinds  of  ad- 
ministration,    say     railroad     management, 


THE    ORGANIC    FUNCTIONS  39 

would  have  different  organic  functions  from 
these.* 

The  practical  value  of  distinguishing  be- 
tween these  organic  functions  rests  on  the 
fact  that  they  are  independent  of  one  an- 
other. They  form,  to  use  a  familiar  simile, 
"water-tight  compartments".  Efficiency  in 
any  one  function  is  independent  of  efficiency 
in  any  other.  If  our  Comparison  is  weak, 
speeding  up  Operation  will  not  mend  it.  If 
Design  is  inefficient,  perfecting  the  system  of 
Control  will  not  make  it  any  better.  If 
Equipment  is  at  fault,  we  cannot  remedy  this 
by  tuning  up  any  other  function. 

This  is  evidently  a  very  important  matter 
to  understand.  These  organic  functions  (if 
correctly  stated)  are  obviously  basic  and 
fundamental  divisions  of  manufacturing  ac- 
tivity. They  form  natural  lines  of  organi- 
zation to  which  all  manufacturing  organiza- 
tion must  conform,  irrespective  of  the  taste 
or  will  of  the  organizer.  Consequently,  it 
follows  that  those  organizations  that  con- 
form to  these  primary  elements  in  the  most 
simple,  the  clearest  and  the  most  direct  way, 

*  Though  railroad  management  is  often  called  i '  manu- 
facture of  transportation ' '  the  phrase  has  little  to  recom- 
mend it.  The  organic  functions  of  railroading  and  manu- 
facturing are  quite  dissimilar. 


40         SCIENCE   AND  PRACTICE    OF    MANAGEMENT 

will  be  the  most  efficient  examples  of  manu- 
facturing administration. 

Considered  as  a  whole,  these  organic  func- 
tions exhibit  the  operations  of  manufactur- 
ing reduced  to  their  simplest  elements.  They 
may  be  regarded  as  a  map  showing  the  short- 
est roads.  While  it  is  possible  to  go  from 
one  place  to  another  by  other  roads,  the 
shortest  road  must  be  selected  if  efficiency  in 
speed  of  travel  is  desired.  They  have  there- 
fore a  double  application — they  indicate  the 
fundamental  points  of  view  to  be  considered 
in  setting  up  a  new  organization,  and  they 
give  material  help  in  diagnosing  the  troubles 
of  an  existing  organization. 

The  five  organic  functions  are,  as  above 
stated,  virtually  water-tight  compartments. 
Now,  if  we  observe  that  a  certain  ship  lists, 
it  is  of  the  first  importance  to  know  in  which 
compartment  the  leak  exists.  If  more  than 
one  leaks,  it  is  desirable  to  know  which  leaks 
the  most,  and  not  to  waste  energy  in  re- 
pairing the  one  that  leaks  slightly,  when  an- 
other is  admitting  water  freely.  Eeducing 
the  leak  in  one  compartment  does  not  reduce 
the  leaks  in  any  other.  We  want  to  know 
with  certainty  the  exact  locality  of  the  most 
serious  leak. 


THE    ORGANIC    FUNCTIONS  41 

In  industrial  matters  this  kind  of  question 
is  frequently  up  for  solution.  Inefficiencies 
in  business  cannot  be  diagnosed  as  easily  and 
quickly  as  leaks  in  a  series  of  tanks,  and  it 
frequently  happens,  in  the  absence  of  a  clear 
perception  of  the  very  different  functions  of 
administration  herein  described,  that  energy 
is  wasted  in  repairing  the  most  obvious  de- 
fects, instead  of  the  most  dangerous  defects. 
•  The  first  thought  of  many  people,  when 
confronted  with  the  problem  of  tuning  up  a 
failing  business,  is  to  " speed  up"  Operation, 
i.  e.,  to  "increase  output".  Now  it  may  easily 
happen  that  to  increase  output  as  a  first  step 
may  just  be  the  very  worst  thing  that  could 
be  done.  The  dangerous  leak  may  not  be  in 
that  compartment  at  all.  The  extra  strain 
thus  put  upon  a  badly  adjusted  Equipment, 
or  a  weak  system  of  Control,  may  prove  to 
be  the  last  straw  that  breaks  the  whole  affair 
down.  Many  firms  have  found  their  product 
more  costly  and  their  deliveries  more  unre- 
liable, notwithstanding  that  the  improve- 
ments made  in  their  operation  were  both  ob- 
vious and  considerable. 

The  object,  therefore,  of  analyzing  manu- 
facturing administration  into  its  prime  ele- 
ments or  functions  is  to  establish  rules  for 


42        SCIENCE   AND  PRACTICE   OF   MANAGEMENT 

practical  guidance  on  the  bed-rock  of  fact. 
We  commence  by  observing  facts,  and  after- 
wards their  relations.  Now  the  basic  facts 
of  administration  appear  to  be  the  five  or- 
ganic functions  under  discussion.  It  will  be 
desirable  to  begin  by  delimiting  these  func- 
tions, and  establishing  their  existence  as  pri- 
mary facts,  proceeding  afterwards  to  exam- 
ine the  laws  by  which  their  mutual  rela- 
tions are  controlled. 

THE  ORGANIC  FUNCTION  OF   "  DESIGN '\ 

In  considering  the  subject  of  manufactur- 
ing, the  first  question  that  arises  is — "manu- 
facturing what  V9  If  we  visualize  ' '  product ' ' 
as  the  answer,  it  must  be  visualized  in  terms 
of  shape,  size,  and  material,  at  least.  We 
cannot  have  a  product  that  does  not  possess 
at  least  shape,  size,  and  material.  It  may 
possess  other  properties  also,  such  as  color, 
surface-finish,  strength,  marking  or  pattern, 
chemical  composition,  and  so  forth.  But 
whatever  these  properties  may  be,  they  exist 
by  virtue  of  a  previously  imagined  design. 

Here,  then,  is  one  natural  and  perfectly 
definite  organic  function,  the  existence  of 
which  cannot  be  gainsaid.  For  everything  in 
the  way  of  product  must  have  had  a  begin- 


THE    ORGANIC    FUNCTIONS  43 

ning  at  some  time  or  other  in  an  act  of  de- 
sign. Every  new  variety  of  product  must 
begin  in  someone 's  mind.  It  must  be  worked 
out  in  someone 's  mind.  It  requires  a  con- 
scious aim  on  somebody's  part.  Whether  the 
act  of  designing  lies  wholly  in  thinking  out 
a  new  chemical  formula  or  imagining  and 
drawing  a  new  shape  and  size  of  piece;  or 
whether  it  requires  this,  and  more,  namely, 
the  planning  of  "jigs"  in  a  machine  shop, 
or  of  "cards"  in  a  textile  mill;  or  whether, 
on  the  other  hand,  the  new  product  cannot 
be  physically  realized  until  a  new  machine 
has  been  constructed,  or  an  old  one  modi- 
fied to  produce  it — it  remains  equally  true 
in  all  these  cases  that  a  conscious  act  or 
series  of  acts,  of  design,  pure  and  simple, 
must  first  have  taken  place. 

The  important  thing  to  observe  at  this 
point  is  that  this  conscious  mental  effort 
is  one  of  design,  and  of  nothing  else.  By 
designing  an  object,  we  do  not  make  it  as 
a  product,  we  do  not  set  anything  in  motion 
to  make  it.  Our  act  is  wholly  unassociated 
with  any  further  necessary  action.  In  fact 
many  designs  die  at  their  birth,  and  none 
of  the  other  functions  come  into  play  at  all 
with  regard  to  them.  Design,  therefore,  must 


44        SCIENCE   AND  PRACTICE    OF   MANAGEMENT 

be  recognized  as  an  organic  function  entirely 
independent  of  all  the  others.  It  does,  how- 
ever, necessarily  precede  the  functioning  of 
any  of  the  others.  Unless  we  have  designed 
something  (or  have  taken  someone  else's  de- 
sign) we  cannot  operate,  we  cannot  compare, 
we  cannot  control,  we  cannot  run  equipment, 
for  we  have  as  yet  nothing  to  manufacture. 
The  function  of  Design,  though  always  and 
necessarily  present,  has  a  very  varying  de- 
gree of  development  in  different  industries. 
In  some  it  is  merely  rudimentary,  in  others 
it  forms  a  considerable  part  of  the  total  ex- 
pense of  manufacturing.  In  one  kind  of  in- 
dustry design  is  never  undertaken  without 
the  certainty,  or  at  any  rate  the  intention, 
that  it  will  presently  be  translated  into 
product.  In  another  kind  of- business  the 
preparation  of  designs  is  a  highly  specula- 
tive undertaking,  for  the  purpose  of  seeking 
orders  which  after  all  may  go  elsewhere.  In 
one  kind  of  industry  designing  is  nearly  all 
art.  In  another  it  is  closely  associated  with 
science.  In  some  cases  design  of  the  product 
itself  ends  the  matter.  In  other  cases,  de- 
sign of  the  product  must  be  followed  by  de- 
sign of  tools  and  fixtures,  or  even  by  de- 
sign of  new  machines  before  it  can  be  real- 


THE    ORGANIC    FUNCTIONS  45 

ized.  Yet  in  most  of  these  diverse  cases  the 
points  where  the  act  of  design  begins  and 
where  it  definitely  ends  remain  clear  and  un- 
mistakable. 

Design  is  the  prescriptive  function.  It  pre- 
scribes in  advance,  shapes,  sizes,  properties. 
It  sets  up  standards  in  regard  to  product. 
It  specifies  intentions.  It  is  the  original 
source  of  action  and  the  final  arbiter  in  de- 
termining what  action  shall  be  taken.  All 
the  other  functions  exist  for  the  purpose,  and 
only  for  the  purpose,  of  carrying  out  the  be- 
hests of  Design.  Consequently  the  impor- 
tance of  careful  and  correct  design  cannot  be 
overestimated.  As  it  is  the  source,  so  it  may 
be  the  poisoned  source  of  all  the  other  ac- 
tivities, the  originator  of  inefficiencies,  the 
advance  agent  of  disastrous  loss.  In  propor- 
tion as  the  industry  is  a  complex  one,  in  pro- 
portion as  the  product  is  made  up  of  ac- 
curately fitting  components,  or  has  to  pass 
through  finely  adjusted  processes  in  series,  is 
the  task  of  design  more  and  more  difficult 
and  important. 

All  this  will  no  doubt  be  admitted  with- 
out discussion,  because  the  idea  is  familiar  to 
everyone  concerned  with  manufacturing. 
But  while  the  commencement  of  the  process 


46         SCIENCE- AND  PRACTICE    OF    MANAGEMENT 

of  design  can  be  readily  pictured — the  first 
rough  and  vague  ideas  as  they  present  them- 
selves to  the  mind  of  the  designer,  the  final 
limits  of  design  are  by  no  means  as  clear  in 
some  industries  as  in  others.  Where  the  mat- 
ter is  a  very  simple  one,  say  the  production 
of  some  flat  stamped  part  of  brass,  it  is  gen- 
erally assumed  that  the  work  of  the  designer 
is  over  when  he  has  drawn  it  accurately  to 
scale.  It  is  then  for  the  tool-maker  to  pre- 
pare his  dies  so  that  they  cut  out  a  facsimile 
of  the  design,  and  that  is  all  there  is  to  the 
complete  process. 

But  if  we  consider  Design  as  the  prescrip- 
tive and  originative  function,  its  limits  can- 
not be  properly  drawn  at  this  point,  even  in 
so  simple  a  case.  The  material,  and  the  size 
and  shape  of  the  piece  have  been  specified, 
and  a  standard  thereby  set  up  that  Opera- 
tion must  strive  to  attain.  We  have  pre- 
scribed dimensions  as  regards  material,  but 
we  have  not  prescribed  dimensions  as  re- 
gards time  or  labor.  Yet  modern  practice  is 
beginning  to  demand  that  the  specification  of 
labor  in  regular,  recurrent  jobs  shall  be  care- 
fully attended  to.  It  will  be  desirable  to  dis- 
cuss the  reasons  for  regarding  this  work  as 
a  part  of  Design. 


THE    ORGANIC    FUNCTIONS  47 

If  instead  of  a  simple  flat  piece  of  brass, 
it  were  required  to  make  a  component  of 
rather  twisted  shape,  with  holes  and  grooves 
in  it,  and  with  a  surface  or  surfaces  that  had 
to  fit  other  parts  with  considerable  exactness, 
then  it  is  not  too  much  to  say  that  the  design 
of  this  part  should  be  carried  out  while  keep- 
ing in  view  the  method  in  which  it  is  to  be 
made.  To  design  a  piece  that  cannot  be 
made  is,  of  course,  useless.  To  design  one 
that  can  be  made  only  with  great  difficulty, 
and  with  an  unusual  expenditure  of  labor,  is 
undesirable.  In  proportion  as  the  designer 
pictures  to  himself  the  operative  processes — 
the  specific  acts  of  hand  or  machine  opera- 
tion— necessary  to  carry  out  each  detail  in 
the  design  as  he  settles  it,  so  will  the  chances 
of  economical  manufacture  be  increased.  But 
this  implies  that  his  ideas  on  the  suitable  way 
to  make  the  piece  should  be. recorded  and  in- 
corporated along  the  drawing  and  thus  made 
part  of  the  design.  In  other  words,  we  have 
here  a  further  specification  or  prescription, 
beyond  dimensions  of  material,  namely  pre- 
scription of  the  kind  of  operation. 

We  cannot  stay  to  discuss  here  the  condi- 
tions under  which  it  is  useful  to  study  and 
specify  in  advance  the  time  of  operation  (and 


48        SCIENCE   AND  PRACTICE    OF    MANAGEMENT 

compensation  for  labor  which  depends  upon 
time)  and  the  nse  of  particular  tools  and 
machines.  But  whenever  snch  work  is  desir- 
able, it  must  be  regarded  as  a  completion 
of  Design  and  nothing  else.  This  rule  does 
not  arise  from  the  necessities  of  classifica- 
tion, it  is  not  a  mere  concession  to  nomen- 
clature. It  arises  from  the  practical  fact  that 
design  for  use,  i.  e.,  the  physical  shape,  etc., 
of  the  piece,  and  design  for  manufacture,  i.  e., 
the  indication  or  prescription  of  the  method 
of  manufacture,  are  very  intimately  con- 
nected, and  that  neither  of  them  is  connected 
with  anything  but  that  one  individual  piece. 

In  those  industries  in  which  these  matters 
are  worked  out  in  advance,  we  must  regard 
the  design  as  incomplete  until  all  the  speci- 
fications that  it  is  intended  to  make  in  ad- 
vance are  equally  completed.  These  speci- 
fications will  then  represent  the  full  set  of 
behests  that  Design  has  to  make  to  Opera- 
tion about  that  particular  article.  Whether 
or  not  the  article  is  ever  made  does  not  mat- 
ter, and  this  consideration  forms  the  natural 
dividing  line  between  what  completes  Design 
and  every  subsequent  operation.  Design  pro- 
vides a  string  of  particulars,  of  specifica- 
tions and  standards,  and  hands  them  over 


THE   ORGANIC    FUNCTIONS  49 

to  Operation  to  carry  out.  If  Operation  does 
not  carry  them  out,  one  of  three  things  will 
happen.  Either  (1)  nothing  at  all  is  made, 
or  (2)  something  is  made  which  is  physically 
different  to  what  the  design  calls  for,  or  (3) 
the  correct  physical  standard  has  been 
reached  by  different  methods,  or  by  the  use 
of  different  tools,  from  those  specified. 

The  first  case  has  little  significance,  be- 
cause it  obviously  arises  from  some  outside 
influence,  such  as  cancellation  of  an  order; 
the  second  case  means  usually  that  someone 
has  blundered,  and  that  rejection  will  follow; 
the  third  case  will  usually  mean  that  either 
a  better  way  has  been  discovered  in  the  shop, 
.or  that  exigencies  of  some  sort,  like  break- 
down of  machinery,  made  it  necessary  to 
override  the  specification.  But  in  each  of 
these  three  cases,  the  design  remains  unal- 
tered, and  is  available  for  future  use  until 
it  is  modified  in  some  particular.  In  other 
words,  all  these  preliminary  specifications 
are  acts  of  design  and  nothing  else.  They 
do  not,  of  themselves,  make  product,  they  do 
not  set  anything  in  motion  to  make  it, — they 
are  wholly  unassociated  with  any  further 
necessary  action.  They  can  be  used  as  a 
basis  of  operation,  or  put  away  on  a  shelf, 


50        SCIENCE   AND  PRACTICE    OF    MANAGEMENT 

with  perfect  indifference.  They  are  self- 
contained  designs,  and  cannot  be  regarded 
in  any  other  light. 

This  insistence  that  Design  includes  every 
kind  of  specification  pertaining  to  a  certain 
product  may  seem  unnecessary,  but  we  shall 
see  in  subsequent  chapters  that  it  is  of  great 
practical  importance.  In  some  industries  of 
course,  Design  is  quite  rudimentary — it  may 
take  the  form  of  a  simple  recipe  or  chemical 
formula,  but  in  no  industry  is  it  entirely  ab- 
sent. 

We  may  now  indicate  the  scope  of  De- 
sign, in  a  type  of  industry  in  which  it  is  at 
a  maximum  of  development,  by  means  of  a 
tabular  statement  as  shown  on  pp.  51-52. 

It  will  be  observed  that  we  have  confined 
our  attention  entirely  to  that  aspect  of  De- 
sign which  has  to  do  with  pre- arrangements 
for  manufacture.  There  is,  of  course,  an- 
other side  of  Design  which  has  to  do  with 
the  technical  efficiency  of  the  product  itself. 
The  efficiency  of  Design  for  technical  use  and 
its  efficiency  for  economical  manufacture  are 
entirely  separate.  We  may,  for  example,  de- 
sign a  new  kind  of  machine  to  do  some  spe- 
cial class  of  work.  When  built,  however,  it 
may  prove  to  be  less  useful  than  was  antici- 


THE   ORGANIC    FUNCTIONS  51 

TABLE   I.       SCOPE   OF    THE   ORGANIC    FUNCTION   OF   DE- 
SIGN AT  ITS   FULLEST  DEVELOPMENT. 

Nature  of  Material.  May  include  specifi- 
cation of  constitution  of  material,  such  as  iron, 
steel,  brass,  yarns,  or  other  particular  materials, 
and  alloys,  or  other  particular  kinds  of  mix- 
tures; and  of  physical  properties,  such  as  hard- 
ness, elasticity,  elongation,  etc. 

Shape  and  Dimensions.  May  include  spec- 
ification of  margins,  allowances,  fits,  tolerances, 
and  prescribe  sizes  of  sheets  or  rolls  from  which 
the  pieces  are  to  be  cut  and  "number  out". 

Other  Properties.   Specification  may  include 

the   prescription   of    surface-finish,    patterns    or 

markings,  color  or  shade,  etc.     It  may  also  be 

concerned  with  exact  quantities,  as  in  chemical 

.manufacture. 

Template,  Jigs,  etc.  In  addition  to  the  de- 
sign of  the  unit  of  product,  it  may  be  necessary 
to  design  special  jigs,  templates,  or  cards,  and 
special  machine  fixtures. 

*  Tools.  In  some  industries  it  may  be  de- 
sirable to  specify  the  exact  tool,  drill,  broach, 
reamer,  or  tap  by  which  the  dimensions  are  to 
be  realized  or  the  special  type  of  cutter  or  other 
standard  accessory  to  be  used  on  the  jobs.  This 
is  chiefly  for  the  purpose  of  securing  accuracy 
and  saving  time  in  the  operation   department. 

Special  Rigging.  It  is  sometimes  necessary 
to  design  temporary  devices  for  handling  unusu- 
ally bulky,  heavy,  or  awkward  pieces. 

Machines.     In  some   cases   the  new  product 
may  demand  a  novel  kind  of  machine,  or  a  re- 
construction of  an  old  one,  which  has  then  to 
he  designed  specially. 
See  note  on  page  52. 


52        SCIENCE   AND  PRACTICE   OF   MANAGEMENT 

*  The  Method.  May  include  specification 
of  the  particular  machines  to  be  used,  and  their 
speeds  and  feeds,  the  sequence  of  operation,  the 
sequence  of  handling  at  each  operation,  etc. 

*  The  Time.  May  be  specified  as  preparation 
time  and  operation  time.   Details  may  be  carried 

t  very  far,  and  time  of  every  motion  in  extreme 
h  [cases  may  be  specified. 

pated.  But  on  the  other  hand,  its  reduction 
to  components  for  manufacture  and  the  de- 
sign for  manufacture  of  such  components 
may  have  been  extremely  efficient,  resulting 
in  the  machines  being  built  at  the  lowest  pos- 
sible cost. 

This  suppositious  case  shows  that  techni- 
cal design  (or  Design  for  Use)  is  a  separate 
kind  of  aim  from  design  for  manufacture. 
Either  of  them  may  be  highly  efficient,  while 
the  other  is  inefficient.  In  this  chapter  we 
have  considered  design  from  the  manufac- 
turing standpoint  alone.  It  is  taken  for 
granted  that  the  product  is  worth  making, 
and  that  it  represents  the  highest  efficiency 

*  These  items  of  specification  are  necessary  in  proportion 
as  the  science  and  practice  of  operation  is  at  a  low  level, 
or  where,  as  in  some  machine  shops,  there  is  a  great  variety 
of  work  at  each  machine.  In  proportion  as  the  scope  of 
machines  is  limited,  i.  e.,  where  they  can  only  do  one  thing 
at  one  speed,  in  one  way,  the  necessity  for  this  class  of 
detail  disappears.  In  some  industries  there  is  almost  no 
room  for  it. 


THE   ORGANIC    FUNCTIONS  53 

for  Use.  The  technical  efficiency  of  Design 
is  not  a  part  of  the  science  of  Administration. 
This  view  will  be  further  developed  when  we 
come  to  consider  the  technical  side  of  Opera- 
tion. 

Though  a  logical  arrangement  demands 
that  Design  should  appear  as  the  first,  and 
Operation  as  the  last,  in  our  list  of  organic 
functions,  since  the  former  is  the  first  step, 
and  the  latter  the  final  aim,  of  all  manufac- 
turing activity,  it  will  be  more  convenient,  in 
this  chapter,  to  consider  operation  immedi- 
ately after  Design.  Historically  speaking, 
Design  at  one  end  of  the  process  of  manu- 
facture, and  Operation  at  the  other,  are  the 
oldest  and  most  primitive  organs  of  the  busi- 
ness of  making  things.  These  two  are,  in 
fact,  the  functions  of  prime  importance.  In 
primitive  stages  of  industry  they  occupy 
nearly  the  whole  field,  and  the  remaining  or- 
ganic functions  are  merely  rudimentary. 

Even  today,  if  we  give  an  order  to  a  shoe- 
maker-craftsman to  make  a  pair  of  shoes,  he 
first  designs  the  shoes  on  the  basis  of  the 
measurements  he  takes  of  our  feet,  and  then 
proceeds  to  the  operation  of  making  them. 
He  is  his  own  Control;  his  need  of  Com- 
parison is  confined  to  seeing  that  he  keeps  to 


54:        SCIENCE   AND  PRACTICE   OF   MANAGEMENT 

his  measurements,  and  to  the  process  of 
"  trying-on ' ' ;  his  demand  on  Equipment  is 
practically  nil.  Design  and  Operation  are 
the  only  developed  functions  in  craftsman- 
ship. It  seems  desirable,  therefore,  to  con- 
sider the  two  prime  functions  of  manufactur- 
ing together  in  this  preliminary  description 
of  their  fields  of  action,  leaving  the  comple- 
mentary functions  which  have  arisen  out  of 
the  necessities  of  modern  large-scale  indus- 
try till  later. 

The  place  of  Analysis  in  regard  to  Design 
will  be  referred  to  in  the  Chapter  on  Organi- 
zation of  the  Function  of  Design. 

THE   ORGANIC   FUNCTION   OF   OPERATION. 

The  aim  of  Operation  is  the  transforma- 
tion of  material  into  new  forms  conformably 
with  Design.  It  does  this  by  applying  labor 
to  machinery  in  most  cases,  sometimes  by 
labor  alone.  Whether  we  observe  the  drill- 
ing or  planing  of  a  piece  in  a  machine  shop, 
the  eyeletting  or  sewing  of  a  shoe  " upper'', 
the  printing  of  a  page  of  type  matter,  the  em- 
bossing of  a  crest  on  a  sheet  of  paper,  the 
working  of  a  carpet  loom,  the  mixing  of 
chemicals  in  a  vat — the  principle  is  the  same 
in  essence,  namely: — alteration  of  the  status 


THE    ORGANIC    FUNCTIONS  55 

of  materials  in  accordance  ivith  previously 
determined  design.  But  the  two  functions 
are  always  entirely  distinct.  Operation  will 
not  give  rise  to  a  new  design.  Design  by  it- 
self will  not  transmute  material  into  new 
forms.  By  no  possibility  can  we  confuse 
the  end  or  aim  of  these  two  functions,  or 
get  them  mixed.  It  is  therefore  reasonable 
to  believe  that  they  are  truly  fundamental. 

In  Table  I,  however,  it  will  be  seen  that 
Design  in  some  cases  prescribes  methods  and 
times  of  Operation  with  great  minuteness. 
This  should  not  lead  to  confusion,  since  it 
is  well  within  the  scope  of  Design  to  "tell 
which  way".  It  tells  which  way  in  regard 
to  methods  of  operation  only  in  those  cases 
where  Operation  might  have  several  alterna- 
tive ways  of  doing  the  work,  and  it  indicates 
what  it  considers  to  be  the  better  way.  But 
"telling  which  way"  is  not  doing  the  work. 
It  is  the  function  of  Operation  to  do  the 
work.  Even  when  the  "way"  is  prescribed, 
it  may  still  do  it  badly. 

Operation  comprises  the  actual  technical 
processes  of  manufacture,  the  operation  of 
the  machine,  the  use  of  the  tool,  and  the  skill 
of  the  foreman  and  of  the  operative,  as  em- 
bodied in  the  way  they  apply  the  tools  and 


56         SCIENCE   AND    PKACTICE    OF    MANAGEMENT 

machines  to  the  material.  Alteration  in  the 
status  of  material  is  the  fundamental  and 
distinguishing  act  of  Operation. 

Necessarily,  industries  differ  in  the  func- 
tion of  Operation  to  a  much  greater  extent 
than  in  any  other.  Every  industry  must 
have  a  fully  organized  function  of  Operation, 
and  this  will  be  the  most  highly  individual- 
ized part  of  it.  The  technical  processes  in- 
volved in  making  carpets  or  in  bleaching 
have  no  relation  to  those  involved  in  making 
locomotives  or  furniture.  The  making  of 
silk  neckties  demands  wholly  different  kinds 
of  skill  and  wholly  different  machinery  to 
the  making  of  steel  rails.  But  in  each  of  these 
industries  the  operative  function  will  be 
clearly  marked  off.  Whether  we  are  dealing 
with  wool,  cotton,  wood,  silk  or  steel,  it  is 
the  alteration  of  status  in  these  respective 
materials  that  is  the  task  of  Operation. 

Operation,  then,  is  the  function  which 
makes,  transmutes,  or  transforms.  All  the 
other  functions  are  set  up  with  a  view  to 
serve  Operation.  Design  tells  What  and,  in 
some  cases,  Which  W^ay;  Equipment  pro- 
vides suitable  conditions  for  Operation,  Con- 
trol arranges  matters  so  that  Operation  may 
be  continuous  and  without  hitch;    Compari- 


THE    ORGANIC    FUNCTIONS  57 

son  observes  and  records  how  far  Operation 
has  complied  with  the  intentions  of  Design. 
Bnt  the  end  of  all,  the  main  aim  in  manu- 
facturing of  every  kind,  is  Operation. 

The  technical  efficiency  of  operation  is  not 
part  of  the  science  of  administration.  The 
action  of  dyes,  the  strength  of  yarns,  the 
properties  of  materials,  the  strength  of  cast- 
ings, the  wearing  properties  of  silk  ties,  the 
durability  of  steel  rails,  are  not  in  the  prov- 
ince of  an  administration  expert,  but  in  that 
of  a  technical  expert  in  one  or  other  of  the  in- 
dustries concerned.  In  other  words  the  tech- 
nical basis  of  operation  is  not  a  part  of  the 
science  of  management. 

When  an  executive  claims,  as  he  frequently 
does,  that  "my  industry  is  peculiar",  he  is 
wholly  right  as  regards  the  function  of  Oper- 
ation, and  largely  wrong  as  regards  the 
science  of  management.  In  every  industry, 
and  even  in  most  plants  in  the  same  industry, 
the  department  of  Operation  is  peculiar  and 
individual.  But  in  every  industry  the  func- 
tions and  principles  of  administration  are 
universally  applicable,  and  a  large  number  of 
their  variations  are  common  to  a  wide  range 
of  industries,  to  say  nothing  of  plants.  Now 
the  science  of  management  does  not  teach, 


58        SCIENCE   AXD   PRACTICE   OF   MANAGEMENT 

and  does  not  pretend  to  teach,  operative 
efficiency.  If  we  do  not  know  how  to  temper 
"steel  springs,  or  how  to  prevent  a  fabric  from 
shrinking,  that  is  a  defect  in  operative 
efficiency  that  no  system  of  management  can, 
by  itself,  overcome. 

Given  certain  approved  technical  methods, 
we  can,  by  aid  of  the  science  of  manage- 
ment, do  a  great  deal  to  study  the  effect  of 
those  methods  in  detail,  to  compare  the 
efficiency  of  different  methods,  to  establish  a 
connection  between  amount  of  product  and 
cost  of  labor ;  but  we  cannot  discover  techni- 
cal secrets.  Only  technical  observation  and 
experiment  can  do  that.  The  different  scope 
of  management  and  technology  is  thus  indi- 
cated. The  function  of  Operation  is  a  func- 
tion of  administration.  It  permits  us  to 
apply  the  technical  knowledge  we  possess  in 
the  most  efficient  way,  but  does  not  ensure 
that  our  knowledge  is  the  best.  This  point 
should  be  clearly  understood. 

We  may  now  exhibit  in  tabular  form  the 
principal  fields  of  the  organic  function  of 
Operation*.  They  are  summarized  in  Table 
II,  page  59. 

*  The  place  of  Analysis  in  Operation  will  be  referred  to 
in  the  Chapter  on  "Organizing  the  Function  of  Opera- 
tion '  \ 


THE  ORGANIC  FUNCTIONS  59 

TABLE  II.   SCOPE  OF  THE  ORGANIC  FUNCTION  OF 
OPERATION. 

The  Units  of  Operation.  Operation  is  the 
synthesis  of  a  number  of  separate  trades,  skills,  and 
processes.  Usually,  but  not  always,  these  are  exer- 
cised through  the  operation  of  machines.  In  most 
modern  industries  machines  occupy  nearly  the  whole 
field,  and  such  hand  skill  as  remains  is  usually  in 
the  nature  of  producing  greater  refinement  of  finish 
than  machines  can  be  made  to  give.  Every  distinct 
skill  or  machine  process  is  a  unit  of  operation.  Op- 
eration itself  depends  for  its  efficiency  on  the  appli- 
cation of  processes  to  units  of  product  in  accordance 
with  the  best  technical  practice. 

Preparation  for  Operation.  In  some  industries, 
whenever  product  is  varied,  it  becomes  necessary  to 
modify,  add  to,  or  take  away  some  accessory  of  the 
machine.  This  is  termed  Preparation  and  should 
always  be  reduced  as  much  as  possible,  as  it  is  a  loss 
to  production.  It  is  generally  considered  to  in- 
clude, also,  restoring  the  machine  to  normal  condi- 
tion and  cleaning  up  after  a  job. 

Operation.  Operation  is  the  actual  technical 
work  of  cutting,  pressing,  twisting,  heating,  weaving, 
mixing,  assembling,  etc.,  as  performed  on  the  ma- 
terial in  accordance  with  the  specifications  of  de- 
sign, and  by  aid  of  the  best  technical  effort  able  to 
be  put  forth  by  the  operator. 

Note.  Operation  does  not  include  anything  but 
the  application  of  technical  skill  to  transform  and 
transmute  material.  Therefore  it  does  not  include 
inspection,  maintenance,  or  the  handling  of  product 
at  any  other  time  than  when  putting  it  in  position 
for  operation  and  removing  it  from  the  machine. 


60         SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

Thus  far  we  have  dealt  only  with  the  two 
primal  functions  of  administration,  Design 
and  Operation.  These  have  been  shown  to  oc- 
cupy entirely  independent  fields.  The  act  of 
design  is  in  no  sense  an  act  of  operation, 
hence  it  follows  that  throughout  the  whole 
organization  these  diverse  functions  must  be 
carefully  separated,  or  more  correctly,  not 
be  allowed  to  become  confused.  The  prac- 
tical value  of  recognizing  this  distinction  is 
already  very  great,  notwithstanding  that  the 
other  functions  have  not,  so  far,  come  into 
the  story.  In  planning  an  organization  we 
know  what  properly  belongs  to  a  department 
of  design  and  what  rightly  belongs  to  the 
operative  department.  We  know  that  Design 
prescribes  and  that  Operation  carries  out. 
Consequently  the  allotment  of  duties  should 
be  made  on  these  lines,  not  only  at  the  top, 
but  throughout. 

But  we  know  more  than  this.  We  have 
observed  that  Operation  is  the  technical 
function,  and  this  implies  that  it  will  have 
troubles  peculiar  to  itself,  which  troubles  will 
not  be  avoided  by  doctoring  other  functions. 
If,  as  said  above,  we  do  not  know  how  to 
temper  steel  springs  properly,  improving  De- 
sign,   Control,    Equipment,    or    Comparison 


THE    ORGANIC    FUNCTION'S  61 

will  not  give  us  the  secret  of  success.  Each 
function  has  certain  types  of  inefficiency  of 
its  own,  which  must  be  resolved  within  that 
function,  without  help  from  outside.  It  is  a 
matter  of  great  practical  importance  to  rec- 
ognize precisely  what  these  troubles  are. 
Each  function  is  a  water-tight  compartment. 

Nevertheless,  there  are  some  hindrances 
to  Operation  that  will  be  subject  to  ameliora- 
tion by  the  correct  action  of  other  functions. 
Wastes  will  be  recorded  and  disclosed.  De- 
lays and  interruptions  in  the  movement  of 
materials  will  come  to  light.  Irregularities 
in  the  supply  of  power,  in  the  maintenance 
of  critical  temperatures,  in  the  careless 
handling  of  product,  will  be  regulated;  but 
these  are  only  hindrances,  and  their  absence 
does  not,  in  itself,  heighten  operative 
efficiency.  Why  a  particular  alloy  is  brittle, 
why  a  particular  fabric  will  not  take  the 
desired  "  finish ",  why  a  particular  leather 
cracks  or  splits, — these  are  questions  of  a 
technical  nature  that  technical  inquiry  must 
settle  for  itself. 

Yet,  as  will  be  seen  in  the  succeeding  chap- 
ters, the  science  of  management  does  em- 
brace the  means  and  methods  by  which  these 
technical  problems  can  be  attacked.    It  must 


62         SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

suffice  at  this  stage  to  note  that  the  organic 
function  of  technical  operation  stands  by  it- 
self, in  such  a  way,  and  with  the  clear  ad- 
vantage, that  its  troubles  and  problems  shall 
not  be  confused  with  those  (already  numer- 
ous enough)  of  the  art  and  science  of  man- 
agement proper. 


Chapter  IV 

THE    ORGANIC    FUNCTIONS    OF    ADMINIS- 
TRATION  (Continued) 

T  N  the  previous  chapter  we  discussed  the 
two  primal  organic  functions  of  admin- 
istration, namely: — Design  and  Operation. 
It  will  now  be  necessary  to  discuss  what, 
historically  speaking,  may  be  considered  the 
three  secondary  functions,  viz : — Equipment, 
Control,  and  Comparison. 

In  the  large  plants  of  today,  however, 
these  three  functions,  so  far  from  being  sub- 
sidiary, assume  great  importance.  It  may 
be  laid  down  as  a  law  that  in  the  progress 
of  an  industry,  as  soon  as  any  new  function 
is  superadded  to  the  primal  functions  of 
Design  and  Operation,  it  assumes  equal  rank 
with  these  latter.  In  the  modern  plant,  there- 
fore, it  is  not  correct  to  say  that  Design  or 
Operation  are  more  important  than  Equip- 
ment, Control  or  Comparison,  since  these  lat- 
ter cannot  be  dispensed  with,  and  cannot  be 
permitted  to  fall  into  a  condition  of  in- 
efficiency without  bringing  as  much  trouble 
63 


64        SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

as  would  follow  if  one  of  the  two  first  should 
become  inefficient.  It  is  this  wonderful  sen- 
sitiveness of  the  industrial  organism  in  all 
departments  that  makes  it  so  imperative  to 
settle  some  definite  principles  in  regard  to 
administrative  problems. 

THE    OEGANIC    FUNCTION    OF    EQUIPMENT. 

As  soon  as  any  industry  enters  the  factory 
stage  the  question  of  Equipment  will  begin 
to  assume  importance.  Equipment  is  that 
organic  function  that  provides  conditions  for 
production,  and  these  conditions  are  of 
varied  character.  Every  considerable  busi- 
ness must  have,  for  example,  suitable  prem- 
ises, and  these  premises  must  be  lighted, 
heated,  kept  clean  and  bright,  and  the  space 
they  afford  must  be  utilized  economically. 
Secondly,  power  will  be  required,  and  this 
involves  the  provision  of  equipment  of  an- 
other kind,  which  also  has  to  be  maintained 
and  kept  going.  Thirdly,  the  storage, 
handling  and  transport  of  material  necessi- 
tates suitable  equipment  of  still  another  kind, 
and  this  again  requires  to  be  maintained  in 
a  state  of  efficiency.  Fourthly,  there  is  the 
operative  equipment  itself  which  has  to  be 
repaired  and  kept  in  order. 


THE    ORGANIC    FUNCTIONS  65 

Efficiency  of  Equipment  naturally  has  two 
aspects,  one  of  which  may  be  called  the  in- 
stallation, and  the  other  the  current  or  ad- 
ministrative aspect.  In  the  installation  divi- 
sion must  be  placed  the  selection  and  the  ar- 
rangement of  the  Equipment,  including  the 
very  important  question  of  space-utilization, 
or  lay-out,  the  suitability  of  each  part  of  the 
site  and  buildings  for  the  purpose  to  which 
it  has  been  allotted,  the  question  whether 
this  or  that  method  of  generating  and  trans- 
mitting power  should  be  adopted,  the  provi- 
sion of  proper  storage  bins,  racks  and  fix- 
tures, the  mechanical  means  of  handling  ma- 
terial by  cranes,  travellers,  conveyors, 
trucks,  industrial  railways  and  so  forth,  and 
the  grouping  of  operative  machines. 

All  these  dispositions  are  termed  installa- 
tion questions  because  they  are,  properly 
speaking,  antecedent  to  the  administrative 
use  and  running  of  the  Equipment.  They 
represent  engineering  selection.  Once  the 
Equipment  has  been  installed,  then  its  cur- 
rent use  is  obviously  an  entirely  different 
matter.  The  organic  function  of  Equipment 
therefore  is  concerned  first  with  the  installa- 
tion, and  then  with  the  maintenance  of  all 
the  appliances  used  in  the  factory,  and  that 


66        SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

is  really  its  special  field.  But  in  some  cases 
maintenance  involves  operation  of  the  equip- 
ment itself  as,  for  example,  in  the  case  of 
the  power  service,  and  snch  matters  as  the 
lighting,  heating,  ventilation  and  cleaning  of 
buildings.  On  the  other  hand,  the  working 
of  the  productive  machinery  is  the  function 
of  Operation,  and  the  working  of  the  storage, 
and  conveying  or  material-transporting 
equipment  is  the  function  of  Control. 

Once  the  equipment  has  been  installed, 
then  the  .administrative  maintenance  of 
proper  physical  conditions  becomes  the  chief 
task  of  the  organic  function  of  Equipment. 
It  must  attend  to  the  keeping  of  the  build- 
ings in  good  order,  and  clean  and  bright 
inside;  to  the  question  of  fire  protection; 
to  the  maintenance  of  pure  air  at  the  right 
temperature ;  to  abundant  light,  and  to  pro- 
viding power  in  the  necessary  quantity  dur- 
ing the  right  periods.  All  this  is  obviously 
an  administrative  matter,  viz. :  the  mainte- 
nance of  conditions,  of  physical  conditions 
necessary  to  the  whole  course  of  Production. 
Similarly  the  task  of  keeping  all  machinery 
and  appliances  in  a  condition  of  efficient  re- 
pair is,  with  equal  obviousness,  also  a  main- 
tenance of  conditions  necessary  to  the  work 


THE    ORGANIC    FUNCTIONS  67 

of  the  various  departments  using  such  ma- 
chinery and  appliances.* 

TABLE    III.       SCOPE    OF     THE     ORGANIC     FUNCTION     OF 
EQUIPMENT. 

Buildings.  Allotment  of  different  parts  of 
buildings  to  suitable  uses,  i.  e.,  the  lay-out  of 
departments,  installation  of  appliances  for  light- 
ing, heating,  ventilation,  fire  protection,  etc. 

Power  Plant.  Selection  of  the  right  type  of 
plant,  and  suitable  means  of  distributing  and 
delivering  power  where  required.  Considera- 
tion of  the  margin  of  power  necessary. 

Materials.  Provision  of  adequate  equipment 
for  storage  and  conveyance  of  materials.  Storage 
racks,  bins,  fixtures,  cranes,  travellers,  trucks, 
conveyors,  etc.,  considered  in  reference  to  the 
volume  of  work  and  lines  of  travel. 

Machinery.  Provision  and  installation  of 
machinery  and  design  of  lay-out  in  relation  to 
travel  of  product. 

Buildings.  Eepair  and  maintenance  of  struc- 
tures, maintaining  an  adequate  service  of  light, 
heat,  ventilation,  and  fire  organization.  Keep- 
ing premises  clean  and  bright. 

Power.  Keeping  up  supply  of  power  in 
right  quantity,  during  right  period,  on  an  eco- 
nomic basis.  Attending  to  storage  of  fuel 
against  contingencies,  oiling  shafts,  maintaining 
belts,  and  so  forth. 

Machinery  and  Appliances.     Eepairing   and 
maintaining  all  kinds  of  equipment  in  working 
Lorder. 

*  The  use  of  Analysis  in  regard  to  Equipment  will  be  re- 
ferred to  in  the  Chapter  on  "Organizing  the  Function 
of  Equipment". 


68         SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

Before  leaving  the  subject  of  Equipment, 
it  may  be  well  to  point  out  the  independent 
scope  of  this  function.  It  is  evident,  in  the 
first  place,  that  it  has  nothing  to  do  with 
design  of  product.  Neither  has  it  anything 
to  do  with  the  efficiency  of  technical  opera- 
tion. Its  business  is  to  provide  and  maintain 
suitable  conditions  under  which  Operation 
may  be  free  from  certain  hindrances,  such 
as  dark  and  stuffy  shops,  irregular  supply 
of  power,  inadequate  transporting  appli- 
ances, and  so  forth.  But  its  efficiency  is 
quite  a  separate  kind  of  efficiency  from  that 
of  Operation.  The  conditions  provided  by 
Equipment  may  be  perfect,  and  yet  the 
Efficiency  of  Operation  itself  may  be  at  a  low 
ebb, 

Nevertheless,  in  examining  a  plant  for 
causes  of  inefficiency,  we  should  begin  by  ex- 
amining Design,  and  next  Equipment,  be- 
cause Design  originates  everything  in  the 
way  of  product,  and  Equipment  originates 
everything  in  the  way  of  physical  conditions. 
As  has  already  been  remarked,  efficiency  in 
one  function  does  not  increase  efficiency  in 
another,  since  each  represents  a  totally  dif- 
ferent quality  of  efficiency,  but  on  the  other 
hand,    any  inefficiency   anywhere   is    a  hin- 


THE    ORGANIC    FUNCTIONS  69 

drance  to  the  total  efficiency  of  the  plant, 
and  may  hold  hack  the  possibilities  of 
efficiency  in  any  other  function.  But  remov- 
ing a  hindrance  does  not  increase  other,  quali- 
ties of  efficiency. 

We  may,  for  example,  be  able,  under  the 
most  favorable  conditions,  to  walk  four  miles 
an  hour.  Under  given  poor  conditions,  say  a 
very  bad  road,  our  pace  may  be  reduced  to 
three.  If  the  road  is  improved,  we  may  reach 
three-and-a-half;  if  it  is  made  perfect,  we 
reach  our  maximum  of  four.  But  no  im- 
provement in  the  road  will  enable  us  to  walk 
beyond  our  maximum  pace  of  four.  No  such 
improvement  will  enable  us  to  walk  five.  Yet 
perhaps  competition  might  demand  that  we 
should  be  able  to  walk  five,  or  go  out  of 
the  race.  In  that  case  we  must  tune  up  our 
Operative  function,  viz.,  our  powers  of  walk- 
ing, for  that  alone  is  at  fault. 

When,  therefore,  it  is  said  that  the 
efficiency  of  all  the  functions  is  independent, 
this  is  what  is  meant.  It  is  not  implied  that 
inefficiency  in  one  function  will  not  hinder 
another.  Obviously,  if  one  function  reduced 
its  efficiency  to  zero  (that  is,  ceased  to  act 
altogether),  all  the  other  functions  would 
stop.     If  there  were  no  road,  we  could  not 


70         SCIENCE    AND    PRACTICE    OF    MANAGEMENT      - 

walk  at  three,  four,  or  any  other  number 
of  miles  an  hour.  Similarly,  if  designs  are 
stupidly  made  so  that  process  work  requires 
extraordinary  skill  to  produce  the  results 
specified,  this  will  hinder  Operation  from 
producing  economical  work,  however 
efficient  it  may  be  in  its  own  domain.  But 
the  converse  is  never  true.  If  Operation 
is  careless  and  unskilful  the  best  designs 
or  the  best  equipment  in  the  world  will  not 
improve  these  bad  characteristics  out  of  ex- 
istence. It  may  make  them  less  harmful  in 
their  consequences  but  they  will  still  exist. 

Each  function  has  a  special  kind  of 
efficiency  in  its  own  domain  which  can  be 
hindered  but  never  helped  by  the  conditions 
of  efficiency  in  any  other  function.  It  is  the 
absolute  truth  of  this  law  that  gives  the  or- 
ganic functions  all  the  importance  they  may 
possess  as  practical  guides. 

THE  ORGANIC   FUNCTION   OF   CONTROL. 

This  function  has  also  a  field  of  action 
equally  as  definite  as  that  of  Design,  or  Op- 
eration, or  Equipment.  It  has  its  definite 
aim,  which  is  quite  clear-cut  and  precise.  It 
supplies,  as  it  were,  the  human  motive  power 
of  the  business.     It  seeks  to  move  things. 


THE    ORGANIC    FUNCTIONS  71 

Control,  like  Equipment,  has  its  installa- 
tion as  well  as  its  administrative  aspect.  In 
the  former  sphere  it  fixes  the  relations  of 
persons  throughout  the  plant.  In  the  latter 
sphere  it  selects  the  right  personalities  to 
fill  the  posts  whose  duties  are  thus  fixed,  and 
supervises  their  daily  performance  of  these 
duties.  Control  is,  in  fact,  the  nervous  sys- 
tem (or  more  correctly  one-half  of  the  ner- 
vous system,  the  other  half  being  Compari- 
son) of  manufacturing  administration.  The 
analogy  is  indeed  very  close.  It  conveys  or- 
ders from  the  central  brain  (the  executive), 
it  responds  to  stimuli  from  without,  and  it  is 
more  than  a  mere  telegraph  system  of  nerves, 
for  it  has  well  marked  ganglia,  or  secondary 
nervous  centres,  forming  local  subordinate 
brains  concerned  with  special  duties  (stores 
departments,  pay  departments,  and  so 
forth),  and  responding  automatically  to 
stimuli  without  the  central  brain  being  con- 
cerned. 

It  is  evident  therefore  that  the  arrange- 
ment of  the  system  of  devolution  which  is  the 
most  marked  characteristic  of  the  function  of 
Control  must  be  very  carefully  planned. 
Since  the  executive  cannot  be  in  all  places  at 
once,  it  is  necessary  to  provide  subsidiary 


72        SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

local  brains  or  officers  to  whom  definite  spe- 
cial duties  are  allotted.  Each  of  these  sub- 
sidiary brains  will  have  routine  work,  in  the 
performance  of  which  it  has  been  coached 
and  instructed,  once  for  all,  by  the  central 
brain,  or  executive.  So  long  as  the  stimuli 
to  which  the  local  brains  respond  (or  in  other 
words  the  business  they  transact  daily)  are 
ordinary  matters  of  routine,  the  executive  re- 
mains unconscious  of  them.  But  as  soon  as 
a  stimulus  arrives  not  included  in  the 
routine  (i.  e.,  when  something  unexpected 
•happens),  then  the  subordinate  officer  must 
know  to  what  higher  brain  to  turn  for  in- 
struction. 

Historically  speaking,  all  the  organic  func- 
tions represent  successive  devolutions  of  the 
function  of  administration.  This  is  clearly 
shown  by  Table  IV  (facing  page  73).  In  the 
beginning,  one  man  performs  all  the  func- 
tions of  manufacturing,  as  in  the  case  of  the 
shoemaker  cited  in  Chapter  V.  Then  he 
separates  out  the  function  of  Operation  and 
entrusts  that  to  other  hands.  Next  he  puts 
someone  in  charge  of  his  Equipment  and  so 
denudes  himself  of  that  function.  Then,  pos- 
sibly, he  engages  a  designer  and  ceases  to 
perform  that  function  himself.     Finally  he 


TABLE  IV.     SUCCESSIVE  DEVOLUTION  OF  THE  ORGANIC  FUNCTIONS  OF  MANUFACTURING 
DURING  THE  RISE  OF  AN  INDUSTRY  TOWARD  MODERN  CONDITIONS 

Stage  1.     Beginnings  of  Industry. —  The  craftsman  exercises  all   the  manufac- 
turing functions  in  his  own  person.     (Selling  and  finance  are  not 
included  in  this  discussion.)     "The  day  of  small  things." 
Stage  2.     Devolution  of  Operation.—  A  workman  and  apprentices  are  engaged 
for  the  manual  or  operative  work.     The  workman  exercises  super- 
vision and  becomes  in  course  of  time  a  fully  fledged  foreman.    Later 
he  has  to  devolve  some  of  his  duties  on  other  foremen,  and  is  called 
superintendent.     (Once  an  organic  function  is  separated  out,  devo- 
lution goes  on  within  it.)     At  this  stage  the  owner  looks  after  every- 
thing else,  but  ceases  to  do  operative  work. 
Stage  3.     Devolution  of  Equipment. —  Equipment  begins  to  assume  importance. 
A  mechanic  is  engaged  to  run  the  power  plant,  attend  to  repairs, 
and  do  odd  mechanical  jobs.     Later  we  see  him  represented  by  a 
"works  engineer"  with  a  power  staff,  a  repairs  staff,  an  electrician, 
etc.,  on  whom  these  specific  tasks  have  been  devolved. 
Stage  4.     Devolution  of  Design. —  The  owner  finds  it  necessary  to  devolve  the 
preparation  of  designs  and  drawings,  and  so  engages  a  designer  and 
frees  himself  from  this  function.     The  designer's  work  grows  and 
is  devolved  on  subordinates  until  we  may  find  ultimately  a  chief 
engineer,  chief  draftsman,  a  production  engineer,  an  experimental 
staff,  etc. 
Stage  5.     Devolution  of  Comparison. — Up   to   this   point   the   owner   has   only 
guessed  at  costs,  from  rough  memoranda  compiled  by  himself.     He 
now  devolves  this  work  on  a  cost  clerk,  who  represents  the  account- 
ing side  of  Comparison.  As  the  business  develops  the  cost  clerk  has 
to  devolve  details  on  others,  and  becomes  an  accountant,  with  sub- 
ordinate pay  clerks,  time  clerks,  stores-record  clerks,  etc.     Also  the 
owner  ceases  to  "pass"  on  each  piece  of  completed  work,  and  devolves 
this  task  on  an  inspector,  who  represents  the  technical  side  of  Com- 
parison.    Later  the  inspector's  work  expands  until  we  find  a  fully 
developed  testing  and  inspecting  department. 
Note. — At  this  stage  all  the  activities  of  administration,  exercised  by  the 
owner  of  the  business  at  the  beginning,  have  been  devoluted  to  Organic  Functions 
(themselves  made  up  of  groups  of  individuals  with  specific  duties),  save  and  except 
his  personal  controlling  and  supervising  work — or,  in  popular  language,  his  function 
as  "boss."    This  latter  work,  however,  soon  outgrows  the  possibility  of  his  attending 
personally  to  all  of  it;  hence  we  arrive  at: 

Stage  6.     Internal  Devolution  of  Control. —  Control,   which   remains    vested  in 
the  owner  of  the  business,  is  exercised  by  means  of  a  regular  internal 
devolution  of  this  function.  It  begins  with  the  owner  himself,  who 
is  directly  supervising  the  heads  or  executives  who  have  been  placed 
in  charge  of  the  functions  already  separated  out  (as  above),  and 
also  goes  down  through  the  purchasing  agent,  store  keeper,  order 
department,  correspondence  office,  tracing  department,  shipping 
office,  and  so  forth  in  definite  lines  of  devolution  for  special  duties 
Later  we  find  the  organization  of  "staff"  assistants  and  advisers, 
whose  expert  knowledge  is  at  the  service  of  those  requiring  it. 
Note. — The  five  Organic  Functions  are  now  completely  separated  and  organ- 
ized and  each  has  its  own  internal  system  of  devolution,  enabling  it  to  fulfill  its 
special  purpose.     Our  discussion  of  the  problem  of  management  as  presented  in 
this  book  ends  here.    The  organization  for  manufacturing  is  now  complete.    But  in 
large  businesses  the  owner  (or  the  Board  of  Directors  representing  the  ownership) 
withdraws  still  further  from  actual  contact  with  routine.     We  then  reach : 
Stage  7.     Final  Stage. —  The  Administrative  and  the  Determinative  elements  oi 
Management  are  separated.     The  former  is  devolved  on  a  president 
or  general  manager,  who  is  personally  responsible  for  the  correct 
working  of  the  five  functions  of  administration.  The  Determinative 
element  is  reserved  by  the  directors  as  their  special  field.     They 
decide  on  points  of  policy.     But  as  these  decisions  are  usually  based 
on  financial  considerations  that  have  little  or  nothing  to  do  with 
manufacturing  proper,  this  final  stage  is  not  considered  in  this  book. 


THE   ORGANIC    FUNCTIONS  73 

engages  an  accountant  and  an  inspector  and 
hands  over  to  them  the  function  of  Compari- 
son. But  he  still  has  left  the  function  of 
Control,  which  he  continues  to  exercise. 

As  the  business  grows,  however,  devolu- 
tion within  aH  the  functions  becomes  neces- 
sary. The  designer  must  have  his  assist- 
ants. The  accountant  and  the  inspector  must 
have  subordinates  for  specific  duties.  The 
superintendent  must  have  foremen  and  as- 
sistant foremen.  The  engineer  must  have 
men  for  the  power  plant  and  other  men  for 
the  repair  staff.  And  the  executive  him- 
self, exercising  the  function  of  Control,  will 
soon  find  himself  in  need  of  devolution  also. 
He  cannot  be  in  several  places  at  once.  He 
cannot  receive  customers'  orders,  and  cir- 
culate them  to  those  concerned;  he  cannot 
purchase  material,  nor  receive  and  take  care 
of  it;  and  at  the  same  time  exercise*^  the 
higher  function  of  Control,  namely: — seeing 
that  everyone  is  doing  his  duty  to  the  best 
of  his  ability. 

Consequently  he  devolutes  the  subdivisions 
of  Control,  as  before  he  devoluted  the  big 
organic  functions.  In  this  process  of  throw- 
ing off  or  devoluting  work,  there  comes  a 
time  when  what  is  devoluted  is  no  longer 


74        SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

worthy  of  being  regarded  as  a  separate  or- 
ganic function,  and  so  while  some  case  might 
be  made  out  for  considering  the  purchase, 
care,  and  handling  of  material  as  so  entirely 
independent  a  kind  of  aim  or  activity  that 
it  becomes  organic,  still  it  is  so  intimately 
connected  with  the  prime  factor  of  Control, 
namely  ordering,  that  it  is  best  included  in 
that  function. 

This  imaginary  case  of  the  development 
of  a  plant  from  small  beginnings  will  serve 
to  make  plain  what  Control  really  is.  It  is 
not  Design,  it  is  not  Operation,  it  is  not 
Equipment,  it  is  not  Comparison,  for  we 
have  seen  all  these  organic  functions  thrown 
off  one  by  one  by  our  suppositious  manufac- 
turer as  his  business  is  increased.  It  is  that 
function  which  co-ordinates  all  the  other 
functions  and.  in  addition,  supervises  their 
work. 

In  popular  language  it  is  the  function  of 
the  "boss".  As  Design  is  the  originator  of 
the  nature  of  product,  and  Equipment  is  the 
originator  of  conditions  of  production,  so 
Control  originates  orders.  It  controls  first 
by  arranging  devolution  of  duties  (these 
being  the  installation  of  control  and  its  ar- 
rangements are,  of  course,  static  and  fixed) 


THE   ORGANIC    FUNCTIONS  75 

and  secondly  by  issuing  orders.  It  sets  things 
in  motion  and  keeps  them  in  motion. 

Control  is  the  organ  by  means  of  which 
the  picture  of  management  that  exists  in  the 
mind  of  the  executive  is  realized  as  an  actual 
fact.  No  system  is  ever  more  than  this. 
No  system  can  be  greater  than  the  executive 
that  wields  it  to  effect  his  purposes.  In  our 
admiration  for  clever  arrangements  of  sys- 
tem, of  forms,  books,  schedules,  planning 
boards,  and  records,  this  simple  and  ele- 
mentary fact  has  become  obscured,  but  it 
remains  today  as  true  as  ever.  Incompetent 
generalship  has,  time  after  time  in  history, 
brought  the  most  disciplined  armies  to  grief. 
Competent  leaders  have  also,  time  after  time, 
built  up  victory  out  of  unpromising  mate- 
rials. The  object  of  studying  management 
principles  is  not  to  supersede  leadership,  but 
to  discover  the  most  efficient  system  of  devo- 
lution of  functions  for  the  competent  leader 
to  use. 

The  advantage  of  sound  theory  to  the 
competent  leader  is  nevertheless  great.  It 
saves  his  energy.  He  can  dispose  his  forces 
with  less  thought  and  with  greater  assurance 
than  if  he  had  to  work  out  every  detail  for 
himself.     If  he  is  a  soldier  he  can  arrange 


76        SCIENCE   AND  PRACTICE   OF   MANAGEMENT 

the  duties  of  his  staff,  his  regimental  com- 
manders, his  subaltern  officers,  his  auxiliary 
corps  of  supply,  transport  and  sanitation, 
with  confidence,  and  is  thus  set  free  to  de- 
vote his  attention  more  easily  to  the  prime 
business  of  conducting  war.  He  is  sure  of 
his  subordinate  ganglia  or  local  brains  and 
of  the  way  in  which  they  will  respond  to  the 
stimuli  of  their  daily  routine,  and  that  is  the 
first  condition  of  success  for  all  leaders. 

In  manufacturing,  as  in  all  great  aggre- 
gations of  human  effort,  the  most  difficult 
part  of  administration  lies  in  first  mapping 
out  the  sphere  of  duties  of  individual  men, 
and  then  in  selecting  men  of  the  right  tem- 
perament and  qualifications  to  fill  these 
posts.  In  small  businesses,  we  must  some- 
times fit  the  duties  to  the  men  who  happen 
to  be  at  hand,  but  this  is  one  of  the  reasons 
why  the  very  small  business  finds  it  difficult 
to  compete  with  larger  concerns,  where  dev- 
olution is  on  an  extensive  scale,  and  corre- 
sponds with  the  natural  division  of  the  or- 
ganic functions.  Control,  as  an  organ  of 
administration,  comprises  the  specification 
of  duties,  the  determination  as  to  who  shall 
issue  orders,  and  what  fields  these  orders 
shall  cover ;  who  shall  transmit  orders ;  who 


THE   ORGANIC    FUNCTIONS  77 

shall  receive  and  interpret  orders ;  who  shall 
carry  orders  ont.  It  comprises  also  the  or- 
ganization of  experience  and  advice;  who 
shall  be  the  final  authority  on  purchases,  and 
who  on  tests.  It  comprises  the  careful  plan- 
ning of  subordination,  and  mechanism  for 
adjusting  disputes  between  persons  of  equal 
authority  in  their  respective  spheres.  It  is 
the  organ  concerned  with  duties,  responsibili- 
ties, and  the  exercise  and  limitation  of  initia- 
tive.   It  is  the  great  Organ  of  Synthesis. 

TABLE    V.         SCOPE     OF    THE    ORGANIC    FUNCTION    OF 
CONTROL 

Installation  of  Control 
The  Delimitation  of  Duties 

Within     the     Other     Organic     Functions. 

Commencing  with  the  heads  of  departments, 
i.  e.,  the  men  who  are  in  charge  of  the  organic 
functions  of  Design,  Operation,  Equipment  and 
Comparison,  it  plans  their  duties,  decides  what 
subordinates  they  should  have,  and  what  specific 
duties  these  subordinates  should  fulfill.  It 
therefore  plans  the  interior  structure  of  the  sys- 
tems by  which  these  functions  are  exercised. 

In  Its  Own  Special  Department.  It  plans 
the  relations  between  the  above  departments, 
and  says  which  persons  shall  confer,  and  when. 
It  arranges  all  the  specially  administrative  dur 
ties,  such  as  ordering,  receiving  or  storing  ma- 
terial; receiving  customers'  orders  and  passing 
them  to  the  various  departments  concerned;  su- 


78        SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

pervising  the  current  work  of  all  departments, 
in  the  light  of  costs,  wastes,  delays,  poor  work, 
and  other  irregularities.  It  arranges  all  this  by 
planning  specific  duties  for  specific  persons,  in- 
cluding the  organization  of  specialists'  advice  or 
"staff"  assistance. 

Administrative  Function  of  Control 

Supervising,    Ordering,    Instructing    and 

Training 

Within     the     Other     Organic     Functions. 

Once  organized  under  a  head,  each  function  is 
to  a  great  extent  autonomous.     In  other  words, 
control  of  the  Departments  of  Design,   Opera- 
tion,  Equipment   and   Comparison   is   exercised 
through  the  heads  of  these  departments,  who  are 
responsible  for  seeing  that  their  subordinates  are 
carrying  out  their  duties  as  planned  originally. 
In  Its  Own  Special  Department.      Adminis- 
tratively speaking,  control  is  the  great  co-ordina- 
tive  function.     It  sets  everything  in  motion  by 
issuing  orders.     Its  particular  task  is  to  issue 
orders  in  such  a  way  that,  when  all  have  been 
carried  out,  the  result  is  exactly  what  was  in- 
tended.    It  also  observes  failures,  studies  their 
reasons,  and  sets  in  motion  the  mechanism  of 
instruction  or  training  to  prevent  similar  fail- 
ures in  the  future. 
It  will  be  recognized  that  Control  is  the 
great  organ  for  conducting  manufacturing. 
Design  determines  forms,  shapes,  materials, 
qualities,   and  the  special  tools,  if  any,  by 
which  these  desiderata  are  attained.    Equip- 
ment provides  the  best  known  physical  con- 


THE    ORGANIC    FUNCTIONS  79 

clitions  for  both  personnel  and  material.  Con- 
trol determines  the  acts  of  the  personnel;  it 
has  to  do  with  the  stimuli  that  set  people  in 
motion;  it  deals  with  the  influence  of  one 
person  on  another;  it  communicates,  or- 
ders, explains,  and  teaches.* 

THE    OKGANIC   FUNCTION   OF    COMPARISON. 

Lastly  we  have  Comparison.  This  is  the 
last  of  the  organic  functions  to  be  devoluted, 
as  industry  develops.  It  is,  in  an  organic 
sense,  of  very  recent  growth.  Every  kind 
of  plant  where  a  number  of  men  are  em- 
ployed must  have  some  kind  of  Control  (usu- 
ally the  simple  devolution  of  authority  down- 
wards), but  it  need  not  have  anything  worthy 
of  the  nature  of  Comparison,  save  in  so  far 
as  the  check-book  of  its  owner  and  his  pile 
of  unpaid  bills  represent  that  organic  func- 
tion. In  fact,  in  the  days  of  big  profits  the 
old-time  manufacturer  did  actually  compare 
the  results  of  his  undertakings  month  by 
month  in  just  that  simple  way.  In  other 
wo*ds,  in  former  days  the  organ  of  Compari- 
son was  rudimentary  and  quite  undeveloped. 

The  aim  of  comparison  is  of  an  entirely 

*  The  use  of  analysis  in  Control  will  be  referred  to  in  the 
chapter  on  Organizing  the  Function  of  Control. 


80         SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

different  nature  to  that  sought  to  be  realized 
by  the  other  functions.  It  is  the  organ  by 
which  we  systematically  accumulate  Experi- 
ence. It  is  therefore  the  function  which 
makes  use  of  existing  Standards,  and  also 
compiles  the  data  that  enable  us  to  revise 
these  Standards  from  time  to  time. 

The  great  instrument  of  Comparison  is 
Measurement.  One  of  the  principal  differ- 
ences between  the  older  practice  of  Manage- 
ment and  the  newer  is,  as  Professor  Dexter 
Kimball*  has  pointed  out,  the  substitution 
of  quantitative  for  qualitative  methods  wher- 
ever possible.  Instead  of  ordering  coal  and 
pronouncing  judgment  on  its  quality  after 
it  has  been  burned,  we  specify  calorific  val- 
ues and  ascertain  that  they  are  present  be- 
fore accepting  the  consignment.  Instead  of 
putting  materials  into  the  cupola  and  expect- 
ing them  to  come  out  right,  we  make  sure 
that  they  do  come  out  right  by  analyzing  the 
product  and  ascertaining  that  the  correct 
proportions  exist  in  it.  We  keep  stores  and 
materials  under  lock  and  key  and  weigh  and 
measure  out  what  is  wanted  for  specific  jobs. 
We  analyze  the  elements  of  jobs,  and  find  out 
how  much  labor  should  properly  go  into  them 

*  Principles  of  Industrial  Organization,  p.  249. 


THE    ORGANIC    FUNCTIONS  81 

before  we  contract  with  the  operator  to  do 
the  work. 

All  these  proceedings  involve  Measure- 
ment, but  measurement  by  itself  is  of  little 
value,  unless  we  have  something  with  which 
to  compare  the  quantity  or  value  so  meas- 
ured. To  measure  without  comparing  is  an 
idle  task;  it  would  be  like  the  boys'  amuse- 
ment of  writing  down  the  numbers  of  auto- 
mobiles as  they  pass  him  on  the  highway. 
Measurement,  in  short,  is  but  the  tool  or  in- 
strument of  Comparison. 

But  before  we  can  compare  anything  we 
measure  with  another  measurement,  we 
must  have  the  latter  in  our  possession.  In 
other  words  we  must  already  be  in  posses- 
sion of  a  STAND  ABD.  The'  Organic  Func- 
tion of  Comparison,  therefore,  is  that  which 
concerns  itself  with  the  setting  up  and  com- 
parison of  standards.  Such  standards  may 
not  arise  out  of  the  experience  gathered 
within  the  plant.  They  may  be  standards 
gathered  from  the  experience  of  others  in 
the  first  instance.  Thus  we  may  have  a  stand- 
ard of  power  cost,  of  calorific  fuel  value,  of 
water  evaporation  per  pound  of  fuel, — these 
are  general  standards,  common  to  all  work 
of  the  kind.     Then  there  is  a  class  of  arbi- 


82         SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

trary  standards,  such  as  a  54-hours  week  and 
a  consequent  comparison  of  how  far  em- 
ployes comply  with  such  standard,  or  how 
far  machines  are  operating  all  the  time  or 
less  than  the  time.  Then  there  are  stand- 
ards special  to  the  plant,  such  as  time  allow- 
ances on  jobs,  quantities  of  materials  allowed 
to  be  held  in  stores,  weights  of  castings, 
formulae  for  mixtures,  output  of  specific  ma- 
chines, etc. 

Writing  some  fourteen  years  ago  in  The 
Engineering  Magazine,  the  present  author 
said,  "The  object  of  the  organization  .  .  . 
should  be  to  collect  knowledge  of  what  is 
going  forward,  not  merely  qualitatively  but 
quantitatively;  it  should  provide  the  means 
of  regulating  as  well  as  the  means  of  record- 
ing.' '  This  was  at  the  time  when  cost  ac- 
counting was  being  developed,  and  the  idea 
of  standards  had  hardly  received  discussion, 
but  since  that  date  the  quantitative  idea  has 
steadily  grown,  and  is  now  recognized  as  the 
proper  basis  for  all  industrial  operations. 

Comparison,  it  has  already  been  stated 
above,  is  to  be  likened  to  the  receptive  half 
of  the  nervous  system  of  the  body.  It  has 
its  sub-organs  of  sense,  its  clocks,  time  re- 
corders, weighing  machines,  scales,  counting 


THE   ORGANIC    FUNCTIONS  83 

machines,  chemical  and  mechanical  appar- 
atus for  testing,  just  as  the  nervous  system 
has  the  five  senses  of  sight,  feeling,  taste, 
hearing,  and  smell.  Its  office,  then,  is  first 
to  measure,  then  to  record,  and  finally  to 
compare.  In  practice,  it  is  the  counterpart 
of  Control,  since  its  function  is  to  report  the 
results  of  orders  and  instructions,  and, 
by  comparison  with  standards,  ascertain 
whether  these  orders  have  successfully  at- 
tained their  end. 

Comparison  has  two  well-marked  spheres 
of  activity :  the  one  dealing  with  the  proper- 
ties of  materials,  either  in  their  raw  state, 
or  after  they  have  been  subject  to  Opera- 
tion; and  the  other  concerned  with  Time, 
Quantity,  Number  and  Value.  The  former 
of  these  we  term  the  technical  sphere  of 
Comparison,  and  the  latter  the  accounting 
sphere.  The  technical  side  deals  with  chemi- 
cal and  physical  standards.  It  analyzes  the 
composition  of  material,  such  as  fuel,  alloys, 
chemicals,  steels,  etc.,  which  have  been  pur- 
chased, and  determines  if  they  conform  with 
standards.  It  also,  in  some  cases,  analyzes 
the  results  of  Operation,  and  examines  the 
composition  of  Product  to  see  if  it  accords 
with  the  standards  set  up  by  Design.    Fur- 


84        SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

ther  it  applies  physical  examination  or  ' 'In- 
spection' '  both  to  purchased  material  and  to 
product,  and  performs  physical  tests,  as  for 
hardness,  elasticity,  and  so  forth,  when  nec- 
essary. In  all  cases  the  results  thus  ob- 
served are  compared  with  some  expected  re- 
sult, or,  in  other  words,  with  a  Standard. 

The  accounting  side  of  Comparison  is  con- 
cerned with  figures  rather  than  with  proper- 
ties. It  does  not  investigate,  it  only  records, 
groups,  and  compares  figures.  But  here, 
again,  it  looks  for  agreement  with  certain 
expected  figures,  or  in  other  words  with 
standards.  While  the  great  field  of  account- 
ing is  the  record  and  comparison  of  values, 
still  it  has  other  fields  also.  Certain  efficien- 
cies are  measured  in  time,  such  as  the  at- 
tendance of  employes,  the  utilized  and  idle 
time  of  machines,  periods  of  maturing  or 
seasoning  in  certain  industries;  and  many 
more  are  correlated  with  time,  such  as  the 
power  demand,  variations  of  pressure  or 
vacuum,  of  heat,  etc.  Other  efficiencies  are 
measured  by  number  or  weight,  such  as  the 
conformity  to  standards  set  by  the  firm  for 
maxima  and  minima  of  stores  and  stocks, 
weight  of  fuel  consumed  per  quantity  of 
water  evaporated,  weights  of  the  different 


THE    ORGANIC    FUNCTIONS  85 

components  of  mixtures,  in  accordance  with 
specifications  of  Design,  and  so  forth. 

Lastly  Comparison  is  applied  to  values  ex- 
pressed in  money.  This  is  commonly  known 
as  Cost  Accounting,  but  actually  the  account- 
ing and  the  technical  spheres  of  Comparison 
form  a  single  function,  and  should  be  parts 
of  a  single  whole — the  aim  of  which  is  to 
standardize  whatever  can  be  economically 
standardized  and  to  observe,  record  and 
compare  all  instances  of  non-conformity  with 
such  standards.  If  this  is  not  recognized, 
then  duplication  of  work  and  inaccuracy  of 
record  are  sure  to  result.  Instances  need 
not  be  given  of  what  is  included  in  the  field 
of  cost  accounting,  save  to  recall  that  the 
main  object  should  be  Comparison  of  actual 
with  expected  result,  or  in  other  words  with 
Standards. 

In  all  these  fields  there  will  be  instances 
constantly  recurring  of  want  of  conformity 
to  standard — that  is,  of  inefficiencies  or 
wastes.  The  observation,  record  and  com- 
parison of  wastes  is  one  of  the  most  impor- 
tant services  that  can  be  rendered  by  this 
function.  Even  customary  wastes  can  be 
standardized,  and  these  standards  either 
approached  or  exceeded.    In  a  properly  or- 


86        SCIENCE   AND  PRACTICE    OF   MANAGEMENT 

ganized  function  of  Comparison,  all  the 
avenues  of  waste,  whether  expressible  in 
chemical  or  physical  want  of  conformity  with 
Standard,  or  in  time,  quantity,  number  or 
value,  are  systematically  explored,  so  that 
nothing  escapes  attention. 

Comparison  may  be  with  existing  records 
or  standards  or  it  may  be  for  the  purpose 
of  future  comparison  with  further  records  to 
be  made  at  some  future  day,  but  no  record  is 
of  value  unless  we  are  either  able,  or  expect 
to  be  able,  to  compare  it  with  something  sim- 
ilar. Even  the  compilation  of  a  pay-roll, 
which  does  not  seem  to  have  any  ulterior  ob- 
ject save  as  a  list  of  liabilities,  is  really  a 
record  of  Comparison,  being  the  firm's  ac- 
count of  what  the  man  has  earned,  as  com- 
pared with  his  own  notion  of  what  is  due  to 
him.  And  every  practical  paymaster  knows 
that,  on  pay-day,  these  two  records  do  not  al- 
ways tally. 

In  examining  an  ailing  business,  the 
efficiency  of  the  organ  of  Comparison  is  fre- 
quently found  to  be  low.  In  fact,  measure- 
ment is  frequently  confused  with  Compari- 
son. Elaborate  records  are  prepared,  com- 
plicated cost  systems  installed,  but  the  only 
thing  that  these   should   exist  for,   namely, 


THE   ORGANIC    FUNCTIONS  87 

Comparison,  is  neglected.  In  this  common 
fact  lies  a  demonstration  of  the  importance 
of  basing  all  action  on  adequate  theory.  If, 
in  installing  a  system  of  costs  and  records, 
the  first  question  asked  was,  "With  what 
Standard  are  these  results  to  be  compared  V\ 
it  would  often  profoundly  modify  the  form 
of  the  records  and  their  complexity.  For  re- 
sults can  be  compared  broadly  and  in  masses, 
and  very  important  lessons  deduced  there- 
from. 

The  value  of  detail  only  comes  into  play 
when  we  are  able  and  ivilling  to  compare 
detailed  results  with  detailed  causes,  and  this 
demands  a  very  high  development  of  the 
function  of  control.  If  this  development 
does  not  exist,  then  the  detailed  record  is 
wasted. 

It  need  hardly  be  pointed  out  that  the  aim 
of  Comparison  is  entirely  different  to  the 
aims  of  the  other  four  functions.  It  occupies 
itself  with  quite  different  concerns  from 
these. 

Design  makes  use  of  the  records  provided 
by  Comparison;  so  does  Control;  and  Ope- 
ration is  frequently  brought  to  book  by 
their  aid.  But  Comparison  does  not  design 
anything,    does    not   control    anything,    and 


88        SCIENCE   AND   PEACTICE    OF    MANAGEMENT 

does  not  make  anything;    it  is  an  organic 
function  entirely  separate  and  distinct.* 

FINAL  EEMAEKS   ON   ORGANIC   FUNCTIONS. 

We  have  now  passed  in  review,  briefly  and 
generally,  all  the  five  organic  functions  into 
which  manufacturing  administration  is  nat- 
urally divisible.  We  have  seen  that,  in  the 
progress  of  industry,  these  functions  become 
separated  out,  or  devolved,  one  by  one  as  the 
business  expands.  We  have  also  seen  that 
the  last  thing  that  remains,  after  all  the  oth- 
ers have  been  separated  out  and  set  on  their 
own  feet,  is  the  function  of  control. 

The  five  functions,  though  entirely  distinct, 
and  representing  wholly  different  kinds  of 
aim,  and  therefore  different  qualities  in 
which  efficiency  is  to  be  attained,  are  never- 
theless associated  in  different  degree.  Equip- 
ment is  the  base.  In  a  modern  plant,  it  is 
the  first  thing  required.  It  embraces  the 
very  conditions  of  production,  and  there- 
fore stands  apart.  Design  and  Operation, 
on  the  other  hand,  may  be  considered  a  pair. 
They  have  always  been  in  existence  and  have 
always  been  closely  associated  since  the  first 

*  The  use  of  analysis  in  Comparison  will  be  referred  to 
in  the  chapter  on  ' '  Organizing  the  Function  of  Com- 
parison '  \ 


THE   ORGANIC    FUNCTIONS  89 

cave  man  worked  out  the  idea  of  an  axe,  and 
then  proceeded  to  make  it.  Control  and  Com- 
parison are  also  a  pair.  Together  they  form 
the  brain  and  nervous  system  of  a  plant. 
Comparison  is  the  receptive  half,  it  observes, 
records,  compares  and  transmits  its  observa- 
tions to  Control.  Control  is  the  central  brain 
which  receives  information  from  Compari- 
son, and  from  outside  stimuli,  such  as  cus- 
tomers '  orders  and  directors '  orders,  and 
transforms  its  impressions  into  an  act  of 
will.  It  issues  orders  on  its  own  account 
and  transmits  them  to  its  subordinate  local 
brains  or  ganglia,  and  so, sets  things  going. 
These  analogies  are  not  introduced  for  a 
merely  fanciful  purpose.  They  serve  to  pic- 
ture the  uses  of  the  various  functions.  As 
has  been  remarked  before,  the  division  into 
organic  functions  is  not  fanciful  or  arbitrary 
either.  It  represents  the  division  of  human 
faculty  in  manufacturing,  and  it  is  believed 
by  the  author  that  the  divisions  here  set 
down  are  truly  fundamental  and  natural  divi- 
sions. But,  if  this  be  true,  it  implies  that 
organization  to  be  successful  must  coincide, 
consciously  or  unconsciously,  with  just  these 
natural  lines  of  demarcation,  and  that  where 
these  natural  divisions  are  departed  from, 


90         SCIENCE   AND  PRACTICE    OF    MANAGEMENT 

confusion  and  uncertainty  in  organization 
must  result,  in  proportion  as  they  are  de- 
parted from. 

"We  shall  consider  the  concrete  and  practi- 
cal organization  of  the  organic  functions 
later,  but  first  must  come  the  consideration 
of  certain  regulative  principles,  by  which  this 
organization  must  be  guided  in  every  in- 
stance. These  will  be  dealt  with  in  the  next 
chapter.  The  scope  of  the  organic  function 
of  Comparison  may  be  thus  tabulated  and 
summarized : 


TABLE     VI.       SCOPE     OF     THE     ORGANIC     FUNCTION     OF 
COMPARISON. 

Chemical  Analysis.  Compares  the  composi- 
tion of  materials  with  purchase  specifications 
(which  are,  of  course,  based  on  Standards)  and 
with  the  Standards  specified  by  Design  as  to 
use  of  formulae  of  mixture.  Embraces  all  Com- 
parison other  than  physical,  i.  e.,  all  in  which 
the  constituent  elements  of  bodies  need  to  be 
compared  with  Standards. 

Physical  Analysis,  or  Inspection.  Compares 
the  physical  condition  of  materials  which  have 
been  purchased  or  made,  with  the  Standards 
specified  by  Purchase  or  Design,  such  as  re- 
gards dimensions,  color,  pattern,  surface  finish, 
etc.  Carries  out  physical  tests  for  hardness, 
elasticity,  elongation,  tensile  strength,  etc. 
Passes  on  all  physical  properties  not  necessitat- 
ing analysis. 


THE   ORGANIC    FUNCTIONS  91 

Time.  Eecords  results  of  work  of  which  the 
efficiency  is  measured  in  Time,  and  compares 
with  Standards.  Thus,  attendance  of  employes, 
working  and  idle  time  of  machines,  time  of  op- 
erations in  which  result  is  dependent  on  dura- 
tion, as  in  some  industries,  where  product  is  ma- 
tured, seasoned,  etc. 

Quantity  and  Number.  Eecords  fluctuations 
which  are  expressed  in  quantity  or  number, 
such  as  quantity  of  material  in  stock,  consump- 
tion of  tons  of  fuel  in  proportion  to  pounds  of 
steam  raised,  number  of  employes  present  and 
absent,  weight  of  components  passing  into  a 
mixture,  etc.,  and  compares  these  figures  with 
Standards.  , 

Value.  This  is  the  sphere  of  Cost  Account- 
ing. Eecords  the  cost  of  labor,  expense,  and 
material,  as  and  when  incurred  and  used,  and 
compares  with  Standards.  Classifies  the  results 
of  work  as  utilized  capacity  and  waste.  Groups 
Labor,  Expense  and  Material  so  that  the  Cost 
of  jobs  is  ascertained  and  compared  with  ex- 
pected or  standard  cost  of  such  jobs. 

The  Organic  Function  of  Comparison  is 
concerned  with  observing  and  recording  the 
operations  of  all  the  other  Functions,  and 
comparing  the  results  with  standards.  It  is 
the  organ  which  systematically  accumulates 
Experience  and  records  it  in  such,  a  form  as 
to  be  available  for  application.  Its  broad 
divisions  are  Technical  and  Accounting,  the 
one  dealing  with  properties  of  materials,  the 
other  with  quantities,  numbers  and  values. 


Chapter  V 

THE    KEGULATIVE     PEINCIPLES     OF    AD- 
MINISTHATION,  OE  LAWS  OF  EFFOET 

TITE  saw  in  the  last  two  chapters  that  the 
*  *  five  organic  functions  of  administra- 
tion are  really  the  expression  of  five  entirely 
different  kinds  of  aim,  two  of  these  being 
in  a  sense  primal,  viz. — the  desire  to  Design 
and  the  desire  to  Make;  and  three  are  in  a 
sense  auxiliary,  viz. — the  desire  to  provide 
suitable  conditions  by  Equipment,  the  desire 
to  Control,  and  the  desire  to  Compare  what 
has  been  done  with  what  we  set  out  to  do. 
Yet  we  have  also  seen  that,  in  the  large  mod- 
ern plant,  no  one  of  these  functions  is  now 
of  less  importance  than  another.  The  primal 
functions  of  Design  and  Operation  cannot  be 
worked  on  the  large  scale  without  highly  de- 
veloped Equipment,  Comparison  and  Con- 
trol. 

Another  way  of  describing  the  nature  of 
the  Organic  Functions  is  to  say  that  they 
represent  varieties  of  Effort — Effort  applied 
in  five  different  ways  to  produce  five  differ- 

92 


THE  REGULATIVE    PRINCIPLES  93 

ent  kinds  of  result.  As  this  is  an  important 
definition  for  our  present  purpose,  it  may  be 
desirable  to  explain  just  what  is  meant  by- 
effort  in  this  connection. 

Effort  may  be  mental  or  physical,  but  all 
effort  which  has  visible  results  is  a  mixture 
of  both.  Mental  effort  must  always  have 
some  kind  of  physical  outcome,  or  it  remains 
an  unexpressed  desire.  To  write  a  letter, 
or  compose  a  speech,  is  a  mental  effort  pure 
and  simple,  but  it  remains  latent  in  the 
author's  mind,  until  he  translates  it  into 
physical  effort  of  some  kind,  either  by  writ- 
ing it  down,  or  by  dictating  it  to  a  stenog- 
rapher, or  by  addressing  an  audience.  Only 
thus  can  the  mental  effort  be  expressed  and 
made  to  impinge  on  the  consciousness  of 
others  and  influence  them  to  action. 

It  is  not  necessary  therefore  to  divide  Ef- 
fort into  mental  and  physical  for  practical 
purposes,  since  every  mental  effort  requires 
physical  means  to  express  it,  and  every 
physical  act  on  the  other  hand  must  have 
been  prompted  by  a  thought.  It  will  be  suffi- 
cient for  our  purpose  to  define  Effort  as  any 
kind  of  human  activity  undertaken  with  a 
definite  end  in  view.  We  have  no  need  of  any 
psychological  subtleties   in  the  matter;  we 


94        SCIENCE   AND   PRACTICE    OF   MANAGEMENT 

may  picture  Effort  very  concisely  as — "Man 
trying  to  do  something". 

The  importance  of  this  definition  to  onr 
present  discussion  will  be  realized  when  we 
remember  that  our  Organic  Functions  repre- 
sent five  different  kinds  of  aim.  It  follows 
therefore  that  these  functions  in  actual  work 
represent  "Man  trying  to  do  five  different 
kinds  of  things";  or,  more  correctly — five 
groups  of  men,  each  group  trying  to  do  a 
different  thing.  Eeverting  to  the  use  of  the 
word  Effort  in  this  connection  we  can  say 
that,  in  manufacturing,  there  are  five  differ- 
ent kinds  of  Effort  involved,  each  kind  being 
represented  by  a  separate  organic  function. 

We  have  therefore  an  industrial  body — 
the  manufacturing  plant — with  certain  or- 
ganic functions  clearly  marked,  and  each  of 
these  functions  is  a  structure  ready  equipped 
to  do  some  one  special  thing,  by  the  aid  of 
human  effort.  The  next  question  arises 
whether  this  application  of  Effort  is  haphaz- 
ard, or  whether  it  is  regulated  by  law.  An 
analogy  drawn  from  the  human  body  may 
first  be  considered  before  we  examine  this 
question  at  length. 

The  human  body  has  not  only  organs  and 
a  nervous   system;    it  has   also   controlling 


THE  REGULATIVE  PRINCIPLES  95 

principles  of  action.  In  order  that  the  nor- 
mal functions  shall  go  on,  man  must  eat, 
drink,  breathe  and  sleep.  Similarly,  with  our 
industrial  body,  it  is  not  enough  to  have  or- 
gans like  Design,  Equipment,  Control,  Com- 
parison, and  Operation,  we  must  also  exhibit 
these  organs  in  action,  alimented  by  the  liv- 
ing stimulus  of  Effort. 

Just  as  man  must  be  careful  about  the  food 
he  eats  and  the  air  he  breathes,  so  we  must  be 
careful  about  the  exercise  of  Effort.  The 
efficient  exercise  of  Effort  does  not  come  by 
nature  or  at  any  rate  does  not  come  wholly 
by  nature.  It  requires  training.  Just  as 
man  cannot  distinguish  a  poisonous  fish  from 
an  edible  one  until  he  eats  it,  so  most  of  our 
progress  in  industry,  as  in  other  things,  has 
been  made  by  the  process  of  trial  and  error. 
The  advances  which  have  been  made,  and  of 
which  we  hold  secure  possession  today,  are 
but  a  small  fraction  of  the  failures  and  trage- 
dies that  have  been  long  since  forgotten.  In- 
numerable inventions  are  constantly  being 
made,  not  one  per  cent  of  which  come  to  prac- 
tical fruition.  In  fact,  were  it  not  for  one 
thing,  mankind  could  never  have  progressed 
at  all,  so  many  are  the  pitfalls  and  so  difficult 
the  path  of  success  in  every  department  of 


96        SCIENCE  AND  PRACTICE   OF   MANAGEMENT 

human  endeavor.  Without  this  one  thing  he 
would  be  as  the  animal,  confined  in  a  round 
of  instinctive  habit,  only  to  be  modified  in 
slight  degree  after  ages  of  evolution. 

The  one  thing  that  has  saved  man  from 
this  fate,  this  almost  perpetual  stagnation, 
is  his  faculty  for  accumulating  and  using  the 
fruits  of  experience — and  experience  is  but 
the  record  mentally  assimilated  of  the  efforts 
of  ourselves  or  others  in  the  past.  It  is 
by  this  faculty  alone  that  progress  is  firm 
and  assured.  Thousands  of  years  ago  some 
cave  man  discovered  that  to  bind  a  stone 
onto  a  stick  gave  him  greater  power  to  strike 
a  blow,  and  mankind  spread  the  record  of 
this  experience,  and  never  lost  the  secret. 
We  make  hammers  and  axes  in  much  the 
same  way  still. 

The  first  and  most  important  regulative 
principle  of  manufacturing,  as  of  all  other 
activity,  is  that 

(i)    Experience  must  be  systematically  accumu- 
lated, standardized  and  applied 

Experience  is  the  knowledge  of  past  attain- 
ment. '  It  includes  a  knowledge  of  tvhat  has 
been  done,  and  also  how  it  has  been  done. 
It  is  inseparably  associated  with  standards 


DIAGRAM    II. SHOWING    THE    DISTRIBUTION    OF    THE 

WORK  OF  THE  ORGANIC   FUNCTIONS  IN  A  SIMPLE, 
CONTINUOUS,   CHEMICAL   INDUSTHV. 

For  comparison  with  Diagram  I  showing  the 
Organic  Functional  development  in  a  complex  type 
of  industry. 

Note  the  rudimentary  development  of  the  Func- 
tion of  Design,  which  nevertheless  exists  and  is 
quite  indispensable  to  the  organization.  Also  the 
much  less  developed  Control  (within  the  square 
representing  the  shops).  Once  set  going,  the  proc- 
esses follow  on  one  another  without  the  necessity 
or  even  the  opportunity  for  continual  guidance 
from  the  Function  of  Control.  'What  is  known  as 
"planning"  is  therefore  almost  entirely  absent  in 
this  type  of  industry. 


THE  REGULATIVE   PRINCIPLES  97 

of  performance — that  is,  with  the  ideas  of 
quantity  and  quality  in  relation  to  any  par- 
ticular method  of  doing  something. 

In  practical  matters,  of  course,  this  prin- 
ciple has  a  twofold  application.  It  applies 
first  to  the  building  up  and  creation  of  the 
organic  functions,  and  secondly  to  the  daily 
routine  of  conducting  business  by  means  of 
those  functions.  In  the  former  case  we  com- 
monly apply  experience  gathered  from  out- 
side, that  of  other  manufacturers,  of  en- 
gineers, of  accountants,  of  experts  of  vari- 
ous kinds — that  is,  we  assemble  existing 
standards — and  we  co-ordinate  and  perhaps 
supplement  the  experience  thus  available 
with  that  personally  acquired  by  ourselves. 
The  point  is,  briefly,  that  at  the  very  begin- 
ning of  our  industrial  life,  we  make  use  of, 
and  in  fact  start  from,  the  accumulated  ex- 
perience of  the  past  as  regards  our  particu- 
lar industry. 

Having  started  the  plant,  we  proceed,  or 
should  proceed,  to  accumulate  and  to  apply 
experience  gathered  on  the  ground.  This  ex- 
perience may  not  modify  our  practice,  either 
because  we  have  discovered  nothing  new,  or 
because  we  have  neglected  to  observe  that  the 
principle  calls  for  application  as  well  as  for 


98        SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

accumulation.  Further,  if  we  are  wise,  we 
keep  our  attention  on  what  others  are  doing. 
We  hear  or  read  of  their  new  experiences, 
collate  them  with  our  own  knowledge,  and 
possibly  extend  them  further.  That  is,  we 
revise  our  standards  from  time  to  time.  But 
if  we  do  not  do  this,  if  we  neglect  to  ac- 
cumulate experience  beyond  the  original 
stock  with  which  we  commenced  business, 
and  put  it  to  use,  then  it  is  very  certain  that 
we  shall  stagnate,  and  very  probable  that 
we  shall  come  to  grief. 

The  principle  that  experience  must  be  sys- 
tematically accumulated  and  applied  means 
first  that  we  must  observe  existing  standards, 
and  secondly  that  we  must  constantly  seek 
to  improve  them.  It  is  the  principle  of  sys- 
tematic observation,  of  assimilation  of 
knowledge,  of  study  of  causes  and  results. 
To  a  large  extent  it  is  the  motive  force  be- 
hind all  progress.  Standards  are  the  mile- 
stones which  mark  this  progress,  and  as  was 
explained  in  the  last  chapter,  the  organic 
function  of  Comparison  is  that  in  which  ex- 
perience is  gathered  and  compared  with 
standards.  Hence  it  is  the  function  over 
the  doors  of  which  the  motto  "Experience 
must  be  systematically  accumulated  and  ap- 


THE  REGULATIVE    PRINCIPLES  99 

plied"  should  be  always  in  evidence  as  a 
guide  to  action. 

When  we  speak  of  the  use  of  accumulated 
experience  we  mean  its  translation  into  effort 
of  some  kind.  Otherwise  experience  remains 
a  merely  mental  abstraction,  without  any 
practical  influence.  If  we  know  that  a  cer- 
tain fish  with  blue  fins  is  poisonous,  this 
(though  a  useful  piece  of  knowledge  under 
certain  circumstances)  remains  practically 
inoperative  until  such  a  fish  actually  is 
offered  to  us.  We  have  then  to  go  a  step 
further  and  apply  the  experience,  and  we  can 
only  do  this  by  an  action  of  the  will  dictating 
a  movement  to  the  bodily  organs,  or  in  other 
words  by  an  effort.  We  either  disregard  ex- 
perience, stretch  out  our  hands  and  take  the 
fish,  or  we  allow  experience  to  dominate  our 
effort  and  we  push  it  away. 

This  brings  us  to  the  second  regulative 
principle  of  administrative  action,  namely: 

(2)    Effort  Must  Be  Economically  Regulated 

In  industrial  matters  the  regulation  of  Ef- 
fort is  not  by  any  means  so  simple  an  affair 
as  the  acceptance  or  rejection  above  cited. 
Industrial  Effort  is  very  complex,  and  tends 
to  become  more  so.     It  is  necessary  for  us, 


100     SCIENCE   AND  PRACTICE   OE   MANAGEMENT 

therefore,  to  analyze  further  the  regulation 
of  Effort  as  we  find  it  in  practical  affairs, 
especially  remembering  that  we  are  here 
dealing  not  with  the  effort  of  a  single  man, 
who  can  do  only  one  thing  at  a  time,  but  with 
the  combined  and  simultaneous  efforts  of  a 
collection  of  men  all  working  to  a  common 
end. 

It  will  readily  be  seen  that  this  ques- 
tion of  regulation  of  Effort  becomes  no  mere 
academic  discussion  under  these  circum- 
stances, but  a  matter  of  great  practical  im- 
portance. 

Under  modern  industrial  conditions  the 
regulation  of  Effort  is  a  matter  of  such  com- 
plexity that  its  laws  must  be  closely  studied, 
and  the  methods  of  regulation  analyzed.  The 
first  sub-section  that  naturally  presents  it- 
self is  that  of  Division  of  Effort.  Contem- 
plating a  modern  factory,  the  first  thing  that 
strikes  us  is  that  each  one  of  perhaps  hun- 
dreds or  thousands  of  men  is  engaged  on  a 
different  kind  of  work.  "Without  this  variety 
of  occupations  industry  would  be  impossible. 
To  make  a  typewriter  would  probable  occupy 
the  most  skilful  mechanic  the  better  part  of 
a  life-time,  if  he  had  nothing  to  copy  from, 
and  no  modern  tools  to  assist  him.    The  first 


THE  REGULATIVE   PRINCIPLES  101 

sub-principle  of  the  law  that  Effort  must 
be  regulated,  is  then,  that 

(2a)  Effort  Must  Be  Divided 
It  is  comparatively  easy  to  divide  Effort — 
to  assign  definite  pieces  of  work,  or  definite 
duties  to  this  man  or  that,  whether  these 
pieces  of  work  and  these  duties  are  mental  or 
physical  or  mixtures  of  both.  But  only  very 
simple  and  obvious  tasks  could  be  carried  to 
a  successful  conclusion  if  that  were  all  we 
did.  The  moment  we  divide  Effort  we  di- 
vide responsibility.  More  than  that,  we  di- 
vide control.  If  one  man  is  making  two 
parts  to  fit  one  another  he  is  all  the  time 
looking  ahead  to  the  moment  when  he  will 
have  to  bring  them  together  as  a  single  piece 
of  work.  But  if  the  two  pieces  are  made 
by  different  men,  this  control  vanishes.  The 
two  pieces  will  only  fit  if  we  supplement 
Division  of  Effort  by  another  sub-principle, 
namely,  Co-ordination  of  Effort. 

Whenever,  therefore,  we  divide  Effort,  we 
must  keep  in  mind  this  second  sub-principle : 

(2b)     Effort  Must  Be  Co-ordinated. 
Go-ordination  is  the  converse,  or  it  might 
almost  be  said  the  antidote  or  remedy  for 


102      SCIENCE   AND  PRACTICE   OF   MANAGEMENT 

Division.  For  division  of  Effort  is,  after  all, 
a  necessity  forced  upon  us,  rather  than  a 
principle  specially  admirable  in  itself.  There 
are,  in  fact,  some  kinds  of  Effort  that  it  is 
impossible  to  divide,  and  the  higher  the  fac- 
ulties concerned,  the  more  difficult  it  is  to 
divide  effort  satisfactorily.  In  the  author- 
ship of  a  book,  for  example,  the  possibility 
of  satisfactory  division  of  effort  is  very 
small.  Collaboration  between  two  men  for 
such  a  purpose  is  exceedingly  rare,  and  the 
result  is  still  more  rarely  of  the  first  class. 
Few  great  books  have  had  more  than  a  single 
brain  concerned  in  their  production. 

In  industry,  however,  division  of  labor  is 
a  necessity,  and  as  we  have  seen,  this  divi- 
sion is  applied  to  Effort  of  all  kinds  in  the 
modern  plant.  It  is  necessary  therefore  to 
give  due  prominence  to  the  corrective  prin- 
ciple, that  of  Co-ordination,  if  the  end  which 
we  set  out  to  attain  is  to  be  realized  exactly. 

The  sub-principle  Co-ordination  of  Effort 
might  be  described  tersely  as  the  doctrine  of 
"gap  and  overlap".  We  have  to  make  cer- 
tain that  our  division  of  Effort  does  really 
cover  the  whole  field,  and  secondly  that  Ef- 
fort is  not  duplicated  unnecessarily.  In  prac- 
tice, the  existence  of  ' '  gap  and  overlap ' '  may 


THE  REGULATIVE    PRINCIPLES  103 

frequently  be  found,  and  the  form  they  take 
will  be  discussed  later. 

It  is  not  sufficient  to  divide  a  piece  of  work 
among  several  men,  and  to  provide  means 
(by  drawings,  working  plans,  or  detailed  in- 
structions, or  by  the  nature  of  the  machines 
employed)  whereby  co-ordination  of  the 
separate  efforts  is  secured.  We  must  also 
seek  a  certain  standard  of  efficiency  in  these 
operations.  One  of  the  great  differences  be- 
tween the  newer  ideas  of  what  proper  man- 
agement consists  in  and  the  older  ideas,  lies 
in  recognizing  that  a  further  step  is  neces- 
sary. We  must  see  that  the  work  is  carried 
out  by  the  most  direct  path,  that  the  methods 
employed  by  the  various  persons  are  the 
most  advantageous  methods  known  to  us, 
that  they  are  supplied  with  all  the  appliances 
and  auxiliary  aids  to  good  and  swift  work 
that  experience  has  developed  up  to  now  and 
that  everyone  is  kept  fully  employed.  In 
other  words,  a  further  sub-principle  of  the 
law  that  Effort  must  be  regulated  is  brought 
into  operation,  namely,  the  Conservation  (or 
Saving)  of  Effort.  This  may  in  some  cases 
act  as  a  limit  to  the  division  of  Effort,  be- 
cause division  may  be  carried  so  far  that  it 
becomes  economically  wasteful. 


104     SCIENCE   AXD  PRACTICE   OF   MANAGEMENT 

It  is  not  sufficient  to  do  the  things  required 
so  that  the  end  sought  is  attained,  for  it 
may  be  attained  at  too  great  a  cost.  It  is 
therefore  necessary  to  keep  a  sharp  lookout 
on  the  various  stages  of  the  work  in  the 
light  of  the  sub-principle  that 

(2c)  Effort  Must  Be  Conserved  (or  Saved) 
"We  have  now  arrived  at  the  stage  where 
our  regulation  of  Effort  is  nearly  complete. 
"We  have  distributed  our  work  amongst  a 
number  of  persons ;  we  have  taken  precau- 
tions that  the  work  of  each  will  dovetail  ac- 
curately when  the  various  tasks  are  com- 
pleted ;  and  we  have  observed  that  each  man 
has  the  necessary  skill,  the  proper  tools,  and 
the  requisite  auxiliary  aids  to  perform  his 
task  in  the  most"  efficient  manner  and  the 
shortest  time.  It  only  remains  that  some 
recognition  of  his  skilled  assistance  be  made, 
or  in  other  words,  that  he  be  paid  for  his 
labor.  This  brings  us  to  the  final  sub-prin- 
ciple of  the  Eegulation  of  Effort,  viz. — that 

(2d)     Effort  Must  Be  Remunerated 

The  relation  of  this  sub-principle  to  the 
organic  functions  is  one  that  must  not  be 
misunderstood.     It  has  not  to  do  with  the 


THE  REGULATIVE   PRINCIPLES  105 

nature  of  the  incentive  to  be  applied,  because 
that  is  obviously  a  part  of  the  third  principle, 
presently  to  be  discussed,  viz.,  "the  promo- 
tion of  personal  effectiveness".  It  does  not 
embrace  the  application  of  bonus  or  premium 
systems.  Its  particular  field  is  the  study,  in 
each  organic  function,  of  what  particular 
type  of  Effort  should  be  selected  for  encour- 
agement and  reward.  It  will  be  obvious,  for 
example,  that  incentive  as  applied  to  the 
men  in  the  shop,  might  be  wholly  unsuitable 
for  the  draftsmen,  or  the  clerks,  for  the 
reason  that  their  particular  type  of  activity 
would  not  respond  to  the  same  kind  of  in- 
centive. The  remuneration  of  Effort,  there- 
fore, is  that  principle  which  leads  us  to  the 
analysis  of  the  different  kinds  of  aims  met 
with  in  the  different  organic  functions,  and 
enables  us  to  determine  how  and  ivhere  to 
apply  incentive,  so  as  to  promote  the 
efficiency    of  the  particular  function. 

We  have  now  recognized  two  great  regula- 
tive principles,  (1)  that  experience  must  be 
accumulated  and  applied,  and  (2)  that  Ef- 
fort must  be  regulated  in  four  ways,  namely, 
by  dividing,  co-ordinating,  conserving  and  re- 
munerating it. 

These  two  principles,  it  will  be  obvious, 


106     SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

are  closely  related,  since  the  way  in  which 
we  regulate  Effort  depends  upon  the  de- 
gree of  our  Experience,  and  the  extent  to 
which  we  practically  utilize  such  experience. 
But  as  both  Experience  and  Effort  are 
human  attributes  (for  we  cannot  speak  of 
the  experience  of  a  machine  or  of  its  making 
an  effort)  there  would  seem  to  be  indicated 
a  third  principle,  qualifying  in  some  way  our 
attitude  towards  the  human  factor  in  produc- 
tion, and  bringing  the  latter  into  sharper 
focus.  Such  a  principle  would  obviously  deal 
in  some  way  with  the  one  thing  interesting 
to  us  in  an  industrial  sense,  namely,  the  per- 
fectibility of  the  human  factor  for  our  pur- 
poses. 

Such  a  principle  can  be  formulated,  and 
can  be  expressed  in  the  following  terms,  viz. : 

(3)     Personal  Effectiveness  Must  Be  Promoted 

This  is,  of  course,  equivalent  to  saying 
that  the  quality  and  quantity  of  effort  put 
forth  by  the  individual  are  controllable ;  that 
they  depend  upon  conditions ;  and  that  these 
conditions  can  be  studied  and  adjusted  so  as 
to  extract  the  best  results.  This  principle 
embraces  among  other  things  the  study  of 
incentive.    In  each  organic  function  the  ap 


THE  REGULATIVE    PRINCIPLES  107 

plication  of  the  principle  of  the  Kemunera- 
tion  of  Effort  will  have  shown  what  particu- 
lar directions  of  Effort  should  be  encour- 
aged. It  then  becomes  the  task  of  this  third 
principle  to  effect  that  encouragement.  But 
this  is  really  a  much  wider  matter  than  a 
mere  question  of  incentives,  or  systems  of 
payment.  The  modern  science  of  manage- 
ment recognizes  that  the  human  factor  is  one 
of  the  most  subtle  of  the  problems  with  which 
manufacturers  have  to  deal,  and  that  meth- 
ods of  incentive  to  labor  are  only  one  part 
of  it. 

Personal  Effectiveness  has,  in  the  first 
place,  a  physical  basis.  The  human  organ- 
ism cannot  work  effectively  save  between 
certain  limits  of  heat  and  cold.  It  is  af- 
fected by  humidity,  purity  of  atmosphere, 
quality  of  light,  presence  or  absence  of  noise, 
and  the  necessity  of  eating  and  drinking  at 
certain  intervals.  It  cannot  work,  as  a  ma- 
chine can,  for  indefinite  periods.  On  the  con- 
trary periodic  rest  is  essential  to  it,  and  this 
rest  has  an  important  relation  to  the  quality 
and  quantity  of  work  performed. 

It  has  also  a  psychological  basis.  Men 
differ  from  each  other  in  temperament,  mem- 
ory, forcefulness  or   will,   persistence,   con- 


108      SCIENCE   AND  PRACTICE    OF    MANAGEMENT 

scientiousness  and  a  hundred  other  things. 
Some  are  fitted  to  command  and  some  to 
obey.  Some  wish  to  "get  on"  and  others  are 
perfectly  content  to  remain  in  a  groove. 
Some  have  high  mental  gifts  and  others  high 
moral  gifts.  Some,  on  the  other  hand,  have 
slow,  stolid  natures,  fitted  for  little  else  than 
simple  physical  effort. 

The  field  of  the  third  principle  will  now  be 
clear.  It  concerns  the  study  of  the  personnel 
of  the  industrial  plant  in  their  capacity  as 
human  beings,  and  with  a  view  to  their  im- 
provement as  workers.  It  covers  the  consid- 
eration of  the  conditions  external  to  them, 
by  which  they  are  necessarily  influenced ;  and 
it  covers  the  study  of  their  inner  qualities, 
by  which  study  we  avoid  putting  the  round 
pegs  in  the  square  holes.  Further  it  em- 
braces the  study  of  incentive,  by  which  we 
direct  the  energies  of  each  individual  into 
the  precise  path  of  most  advantage  to  the 
organization. 

The  principle  of  the  Promotion  of  Per- 
sonal Effectiveness  is  the  youngest  of  all  the 
principles  of  administration.  It  is  as  yet 
only  in  its  infancy,  and  its  possibilities  are 
far  from  being  fully  understood.  In  former 
days  it  had  only  one  branch,  viz. : — the  use 


THE  REGULATIVE   PRINCIPLES  109 

of  the  goad.  This  was  superseded  by  the 
simple  principle  of  dangling  the  carrot  be- 
fore the  donkey's  nose.  Neither  of  these 
primitive  methods  will  work  today.  The  di- 
rection in  which  the  application  of  this  prin- 
ciple is  tending  in  modern  plants  is  that  of 
making  the~  individnal  comfortable  in  the 
first  place,— that  is,  removing  all  avoidable 
bad  conditions  from  his  neighborhood ;  sec- 
only,  determining  what  qualifications  are  de- 
sirable for  each  task  or  duty,  and  selecting 
candidates  who  possess  those  qualifications 
in  superior  degree;  thirdly,  providing  ap- 
propriate incentive  so  adjusted  as  to  reward 
the  exercise,  as  a  matter  of  habit,  of  just 
those  special  qualifications. 

Beyond  the  consideration  of  the  individual 
it  comprises  consideration  of  the  mass. 
Esprit  de  corps  must  be  fostered.  It  is  the 
orchestration  of  Effort  that  is  our  aim,  and 
therefore  the  mutual  relations  of  men  must 
be  carefully  studied  and  adjusted.  Each  man 
must  be,  in  a  practical  degree,  persona  grata 
to  the  men  with  whom  he  comes  in  contact. 
Team  work  rests  on  a  basis  of  mutual  re- 
spect, or  at  least  mutual  tolerance.  Discord- 
ant notes  must  therefore  be  eliminated.  All 
these  matters  have  as  yet  received  little  at- 


110      SCIENCE   AND   PRACTICE    OF   MANAGEMENT 

tention.  Systematic  study  of  the  Promotion 
of  Personal  Effectiveness  is  the  great  work 
of  future  years. 

Conclusion. 

We  have  now  enumerated  and  briefly  ex- 
amined what  may  be  fairly  considered  as  the 
main  guiding  or  regulative  principles  of  all 
varieties  of  manufacturing  administration. 
They  may  be  tabulated  as  follows : — 

The  exercise  of  Effort  in  manufacturing 
industry  is  subject  to  three  regulative  prin- 
ciples or  laws  summarized  in  the  table  on 
page  111. 

These  are  universal  principles,  common  to 
all  forms  of  manufacturing  industry,  and  are 
as  true  in  a  textile  mill  as  in  a  machine  shop 
or  a  shoe  factory.  They  are  probably,  in- 
deed, of  universal  application  in  every  case 
where  associated  groups  of  men  are  organ- 
ized for  any  definite  work.  In  other  words, 
if  experience  proves  that  they  have  been  cor- 
rectly stated,  they  may  be  regarded  as  true 
laws  of  effort. 

Properly  applied  they  will  be  found  to  be 
important  aids  to  practical  administration, 
inasmuch  as  they  point  out  what  to  look  for, 
what  precautions  must  be  taken,  what  dan- 


THE  REGULATIVE   PRINCIPLES  111 

gers  should  be  avoided,  and  what  advantages 
may  be  realized,  in  organizing  or  managing 
a  plant. 

TABLE  VII.      THE   LAWS  OF  EFFORT. 

i.     Experience   must   be    systematically    accumu- 
lated, standardized  and  applied. 

2.  Effort  must  be  economically  regulated: — 

2a.  It  must  be  Divided. 
2b.  It  must  be  Co-ordinated. 
2c.  It  must  be  Conserved. 
2d.  It  must  be  Eemunerated. 

3.  Personal  effectiveness  must  be  promoted : — 

3a.  Good  physical  conditions  and  environ- 
ment must  be  maintained. 

3b.  The  vocation,  task,  or  duty  should  be 
analyzed  to  determine  the  special 
human  faculty  concerned. 

3c.  Tests  should  be  applied  to  determine  in 
what  degree  candidates  possess  special 
faculty. 

3d.  Habit  should  be  formed  on  standardized 
bases,  old  or  new. 

3e.  Esprit  de  corps  must  be  fostered. 

3f.  Incentive  must  be  proportioned  to  effort 
expected. 


Chapter   VI 

PEACTICAL  APPLICATION   OF  THE   FIEST 
LAW  OF  EFFOET 

'  A  NEW  organization, ' '  says  a  recent 
^  ^  writer,*  "is  new  in  a  limited  sense 
only.  It  uses  men  of  experience.  It  nses  ex- 
isting machines  and  implements.  It  follows 
existing  methods  of  conducting  business  and 
in  the  general  management  of  its  affairs." 
No  more  succinct  description  of  the  field  of 
the  first  law  of  Effort,  viz.,  that  Experience 
must  be  systematically  accumulated,  stand- 
ardized and  applied,  could  be  given. 

In  beginning  any  enterprise,  the  first  thing 
to  be  done  is  to  ensure  that  the  start  is  made 
at  the  highest  level  of  attainment  yet  known. 
We  must  not  equip  ourselves  with  an  out- 
of-date  plant,  with  inexperienced  officials, 
with  imperfect  materials  or  with  ancient  and 
discarded  methods.  To  do  so  would  be,  in  all 
probability,  to  fail  after  a  brief  career  of 
struggle  against  odds.    But  to  avoid  all  this 

*  Human  Factor  in  Works  Management,  by  James  Hart- 
ness,  p.  46. 

112 


THE   FIRST   LAW   OF   EFFORT  113 

it  is  necessary  to  become  closely  in  touch 
with  what  others  have  done  before  in  the 
same  line  of  effort.  We  must  adopt  the  best 
current  standards.  Having  ascertained 
these,  having  accumulated  this  experience, 
we  must  next  reproduce  it  in  action  or,  in 
other  words,  apply  it.  In  proportion  as  we 
are  successful  in  this  task,  our  chances  of 
success  will  be  increased. 

Similarly,  in  conducting  our  business  from 
day  to  day,  we  shall  have  two  kinds  of  ex- 
perience to  accumulate  and  apply.  One  kind 
will  refer  to  what  others  outside  our  own 
undertaking  are  doing,  the  other  kind  will 
refer  to  changes  and  happenings  within  our 
own  plant.  These  streams  of  experience  will 
need  to  be  collated,  and  the  lessons  they  teach 
transmuted  into  revised  standards  and  new 
practice  when  necessary.  We  shall  find  that 
in  each  of  the  five  organic  functions  we  must 
be  on  the  outlook  for  a  different  kind  of  ex- 
perience to  accumulate  and  apply. 

What  does  this  mean,  expressed  in  practi- 
cal language  ?  It  means  that  as  regards  the 
five  organic  functions  we  must  provide  a  sep- 
arate series  of  standards,  and  that  these 
must  not  be  merely  set  up  when  we  commence 
operations,  but  must  be  continually  brought 


114      SCIENCE    AND    PRACTICE    OF    MANAGEMENT 

up  to  date  and  improved,  by  the  results  of 
the  experience  of  others  and  of  ourselves  be- 
ing incorporated  with  them.  Thus  we  shall 
require  standards  as  to  design,  as  to  opera- 
tion, and  as  to  equipment,  control,  and  com- 
parison. Very  little  consideration  is  neces- 
sary to  realize  that  the  highest  and  best 
standards  are  necessary  in  all  these  func- 
tional activities,  and  that  these  standards 
are  wholly  independent  of  each  other.  High 
standards  of  comparison  may  exist  alongside 
lax  standards  of  control,  in  which  case  the 
lessons  taught  by  exact  comparison  will 
probably  be  wasted,  for  they  will  never  be 
translated  into  new  effort.  In  other  words 
experience  will  be  systematically  accumu- 
lated, but  it  will  not  be  applied. 

Similarly  high  standards  of  operation,  ex- 
tremely skilful  workmen,  fine  machines,  ef- 
ficient processing,  may  exist  alongside  lax 
standards  of  design.  In  such  case  the  effi- 
ciency of  operation  is  not  impaired,  but  the 
total  efficiency  of  the  plant  as  a  whole  is  im- 
paired. High  efficiency  of  design  can  only 
be  brought  about  by  careful  observation  of 
the  laws  of  effort  as  applied  to  the  function 
of  design,  and  so  with  each  of  the  other  func- 
tions. 


THE    FIRST   LAW    OF   EFFORT  115 

(a)  Standards  in  Regard  to  Design 
At  the  outset  the  division  of  Design  into 
design  for  technical  use  and  design  for  man- 
ufacture must  be  observed.  Although  we  are 
considering  the  latter  alone  in  this  inquiry, 
it  may  be  mentioned  that  the  first  law  of 
Effort  applies  to  design  for  technical  use 
also.  For  example,  in  placing  a  new  machine 
or  product  on  the  market,  the  performance 
of  existing  machines  or  the  qualities  of  ex- 
isting product  with  which  we  have  to  com- 
pete, create  Standards  which  we  must  at 
least  equal  and  if  possible  surpass.  Sim- 
ilarly it  is  obviously  necessary  to  be  on  the 
alert  as  to  all  improvements  made  by  our 
rivals,  and  to  study  out  improvements  of 
our  own  if  we  do  not  wish  to  find  ourselves 
some  day  in  an  unfavorable  condition  for 
survival.  This  is  to  say  that  we  must,  as 
regards  the  design  for  technical  use  of  our 
product,  systematically  accumulate  and  ap- 
ply all  the  experience  possible,  so  that  the 
product  does  not  become  inferior  and  get 
passed  in  the  race. 

In  regard  to  design  for  manufacture, 
which  is  the  sphere  of  the  organic  function 
of  Design  as  treated  here,  it  is  also  neces- 
sary systematically  to  accumulate  experience 


116      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

and  set  up  and  apply  standards.  The  stand- 
ards which  we  apply  here  will,  in  fact,  exert 
a  most  powerful  influence  on  the  fortunes  of 
the  plant,  because  as  pointed  out  in  a  former 
chapter,  Design  sets  in  motion  a  long  chain 
of  Effort,  and  if  it  does  not  do  so  efficiently, 
no  degree  of  high  efficiency  further  along 
the  line  will  ever  be  able  to  compensate  for 
the  original  errors  of  method  introduced. 

What  are  the  directions  in  which  design 
for  manufacture  should  accumulate  and  ap- 
ply experience  ?  As  this  aspect  of  Design  is 
an  internal  matter,  the  Experience  to  be 
sought  is  a  thorough  knowledge  of  the  opera- 
tion units — the  machine  processes,  trades 
and  skills  represented  in  the  shops — of  the 
transport  facilities,  in  the  case  of  large  size 
product,  of  the  various  machine  accessories 
necessary  to  production  under  certain  condi- 
tions. As  design  for  manufacture  consists  in 
so  arranging  the  units  of  product  that  they 
correspond  exactly  to  the  facilities  for  manu- 
facture present  in  the  plant,  it  is  obvious  that 
too  much  cannot  be  known  about  such  facili- 
ties by  the  Designer.  Then  there  is  the 
further  question  of  what  parts  should  be 
made  and  what  purchased,  what  parts  are 
kept  in  stock  and  what  parts  must  be  made 


THE    FIRST   LAW    OF   EFFORT  117 

specially.  All  these  questions  will  be  dis- 
cussed later,  but  the  point  now  to  be  empha- 
sized is  that  they  should  all  be  systematically 
gone  over,  and  a  standard  practice  set  up, 
which  practice  should  become  the  working 
tradition  of  the  office.  The  more  standards 
of  this  kind  that .  are  established,  provided 
they  are  wise  and  well  thought  out  stand- 
ards, the  smoother  will  be  the  work  of  de- 
sign, and  the  fewer  will  be  the  errors,  omis- 
sions, and  unnecessary  work  caused  by  un- 
systematic and  unstandardized  practice. 

(b)     In  Regard  to  Equipment 

Both  in  the  installation,  and  in  the  admin- 
istration and  maintenance  of  Equipment  a 
large  field  exists  for  the  systematic  accumu- 
lation, standardization  and  application  of 
Experience.  In  erecting  a  plant  a  knowledge 
of  the  standards  already  recognized  and  es- 
tablished is  essential  if  our  plant  is  to  be 
one  of  the  highest  possible  efficiency.  We 
must  find  out  the  most  advanced  practice  in 
each  department  of  Equipment,  collate  it 
with  our  own  experience  or  that  of  a  compe- 
tent expert,  and  make  our  plans  accordingly. 
Plants  now  building,  for  example,  embody 
very  different  ideas  as  to  day  lighting,  arti- 


118      SCIENCE   AND    PEACTICE    OF    MANAGEMENT 

ficial  lighting,  power  generation  and  trans- 
mission, and  as  to  transporting  and  storage 
arrangements,  from  those  erected  ten  or 
twelve  years  ago.  The  dark,  dismal  and  dirty 
shops  of  the  past  are  being  superseded  by 
light,  bright  and  airy  shops.  A  forest  of 
belting,  with  its  inconvenient  brushwood  of 
counter-shafts  and  pulleys,  is  no  longer  the 
salient  feature  observable  when  entering  a 
modern  shop.  In  some  industries  the  con- 
fusion caused  by  a  crowd  of  help  carrying 
things  about  has  been  banished  by  silent 
smooth-working  conveying  appliances.  And 
many  other  instances  will  occur  to  everyone. 

What  does  this  change  imply?  It  is  simply 
that  much  thought,  much  systematic  study 
has  been  given  to  all  these  matters.  Experi- 
ence has  been  accumulated  with  regard  to 
each,  with  the  result  that  new  standards  have 
arisen  and  have  become  accepted.  In  erect- 
ing a  new  plant  we  must  obviously  search 
out  and  apply  these  standards,  or  our  plant 
is  likely  to  be  inferior  in  some  respect. 

In  the  administrative  aspect  of  Equip- 
ment, similar  conditions  apply.  The  genera- 
tion of  power,  for  example,  is  a  matter  which 
fairly  bristles  with  standards,  and  while  it  is 
the  sphere  of  the  organic  function  of  Com- 


THE   FIRST   LAW   OF   EFFORT  119 

parison  to  make  observation  of  the  data  re- 
garding the  daily  working  of  the  power  plant, 
the  utility  of  this  observation  will  depend 
entirely  on  how  far  we  make  nse  of  it  to 
compare  with  standards. 

The  less  definite  matter  of  maintenance 
and  repair  has  no  such  general  standards 
as,  for  example,  pounds  of  fuel  per  pound 
of  steam  in  the  case  of  the  power  plant.  But 
even  here,  we  have  a  natural  standard — 
freedom  from  breakdown — which  can  be  set 
up,  and  departures  from  it  systematically 
noted  and  studied.  On  the  other  hand  the 
maintenance  of  heating  temperature  has,  of 
course,  an  exact  standard,  viz. : — the  degree 
of  heat  specified  as  measured  by  the  ther- 
mometer. Similarly  all  the  various  physical 
conditions  which  it  is  the  business  of  Equip- 
ment to  maintain  can  be  brought  under  this 
law.  As  regards  all  of  them,  experience  can 
be  systematically  accumulated,  standards  set- 
up, and  these  standards  revised  from  time 
to  time  in  the  light  of  new  experience. 

(c)     In  Regard  to  Control 

The  use  and  application  of  the  accumulated 
experience  of  the  past  with  regard  to  systems 
of  control  is  not  so  easy.    Most  plants  start 


120     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

on  a  small  scale ;  and  as  we  have  seen,  Con- 
trol tends  in  small  plants  to  be  simple  and 
rudimentary.  There  is  but  little  definite  and 
scientifically  based  experience  in  the  past  to 
adopt.  Systems  of  control  have  up  to 
the  present  been  arbitrary  combinations, 
growths  rather  than  structures,  strictly 
adaptable  only  to  the  particular  business  in 
which  they  were  developed.*  We  could  get 
ideas  from  observing  existing  systems  of 
control  but  we  could  not  get  definite  working 
rules  for  guidance.  Nor  is  it  possible  to  get 
much  help  from  the  various  theoretical  sys- 
tems put  forward  of  late  years.  These  are 
for  the  most  part  arbitrary  combinations 
also,  having  a  limited  area  of  application, 
and  adapted  to  few  industries.  They  have 
been  in  some  cases  very  important  contribu- 
tions to  the  subject  of  administration,  but 
after  all  they  are  specific  combinations  and 
not  universal  principles. 

In  any  case  a  small  plant  just  starting 
cannot  have  a  highly  developed  organ  of 
control,  just  as  a  baby  does  not  have  as  large 
a  head  as  a  full-grown  man.    But  while  the 

*  It  will  be  remembered  that  as  industry  progresses,  the 
other  organic  functions  are  definitely  devolved  and  given 
shape,  but  Control  remains  to  the  last  and  is  the  last  to 
be  systematized. 


THE   FIRST   LAW   OF   EFFORT  121 

child's  head  grows  larger  automatically,  a 
system  of  control  is  just  as  likely  to  grow 
wrong  as  to  grow  right.  One  of  the  most  im- 
portant services  which  the  reduction  of  man- 
agement to  a  correct  classification  of  func- 
tions and  regulative  principles  can  offer  is 
the  demonstration  of  the  "why  and  where- 
fore" of  each  department  of  organization. 
Then,  and  only  then,  will  the  beginnings  of 
Control  be  established  on  such  a  basis  that 
they  can  be  developed  harmoniously  as  the 
business  increases  in  size,  and  a  source  of 
disturbance  thereby  eliminated. 

All  this  means  that  standardized  practice 
in  regard  to  Control  is  as  yet  not 
very  definite.  What  standards  exist  are 
negative  rather  than  positive.  "No  man  can 
serve  two  masters"  is  one  of  these,  or  in 
other  words,  we  must  avoid  the  clashing  of 
authority,  and  must  establish  clear  lines  of 
subordination  throughout  the  plant.  The 
idea,  taken  from  military  organization,  of 
"line  and  staff"  is  to  some  extent  a  standard 
of  Control,  but  only  large  plants  can  develop 
such  a  system.  In  applying  it,  a  danger  exists 
of  confusing  executive  with  advisory  func- 
tions, that  is,  of  giving  executive  power  to 
the  latter,  which  is  a  dangerous  practice. 


122      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

But  while  definite  standards  in  the  installa- 
tion of  control  systems  are  as  yet  somewhat 
scarce,  when  we  come  to  the  administrative 
aspect  of  Control,  the  law  that  experience 
must  be  systematically  accumulated,  stand- 
ardized and  applied  has  a  definite  sphere. 
Few  systems  of  control  work  perfectly,  but 
they  can  be  gradually  improved  if  every  in- 
stance of  a  hitch  is  recorded  and  studied,  its 
cause  ascertained,  and  new  standard  practice 
set  up  of  a  kind  to  eliminate  the  defect.  While 
a  "  self  -perpetuating  system"  is  a  myth  and 
contrary  to  common-sense,  nevertheless  a 
considerable  amount  of  self-adjustment  to 
changing  conditions  can  be  made,  if  the  ap- 
plication of  this  first  law  of  Effort  is  kept 
in  mind. 

(d)     In  Regard  to  Comparison 

The  organic  function  of  Comparison  is 
more  fortunate  than  that  of  Control,  inas- 
much as  its  methods  have  reached  a  higher 
degree  of  standardization,  and  a  more  settled 
condition  of  practice. 

The  different  Standards  in  the  technical 
sphere  of  Comparison,  both  chemical  and 
physical,  are  necessarily  definite  and  exact, 
and  our  search  for  experience  will  rather  be 


THE    FIRST   LAW    OF    EFFORT  123 

in  regard  to  methods  of  ascertaining  them 
than  otherwise.  In  the  accounting  sphere 
the  methods  available  for  adoption,  though 
lacking  the  extreme  precision  of  technical 
methods,  are  nevertheless  highly  developed 
and  well-known.  Methods  of  recording  time, 
quantity,  number  and  value  are  many,  and 
in  many  cases  bound  up  with  the  use  of  spe- 
cial appliances  of  a  labor-saving  character, 
but  they  are  in  all  cases  definite,  and  only  re- 
quire study  to  enable  the  right  method  to  be 
selected  as  a  standard. 

But  while  the  methods  of  Comparison  are 
fairly  well  standardized,  the  objects  of  this 
function  are  by  no  means  so  generally  agreed 
upon.  What  should  be  recorded  and  why  it 
should  be  recorded  appear  at  present  to  be 
matters  of  personal  taste,  though  of  course  it 
should  not  be  so.  We  shall  return  to  this 
subject  later,  and  all  that  is  germane  to  our 
present  subject  is  to  point  out  that  while  ex- 
perience as  to  methods  is  available  in  plenty, 
it  is  generally  lacking  in  regard  to  the  ob- 
jects to  be  attained  by  recording  and  com- 
paring data.  Every  plant  can  however  set  it- 
self systematically  to  accumulate  experience 
about  its  own  needs  in  this  respect,  and  so 
set  up  and  apply  its  own  standards. 


124     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

(e)  In  Regard  to  Operation 
Finally  we  come  to  the  organic  function 
of  Operation.  Here  we  may  or  may  not  be 
able  to  draw  copiously  on  the  experience  of 
the  past,  when  settling  the  methods  to  be  fol- 
lowed in  a  new  plant.  In  some  industries  the 
fundamental  principles  of  Operation  are  al- 
ready determined,  particularly  those  indus- 
tries in  which  the  processes  are  largely  scien- 
tific, such  as  chemical  manufacture,  steel 
making,  paper  making,  sugar  manufacture 
and  so  forth.  But  in  other  cases  only  em- 
pirical practice  exists,  unilluminated  by  any 
thought  of  working  principles.  In  machine 
work,  for  instance,  the  classical  researches  of 
Mr.  Fred  W.  Taylor  showed  how  far  the  ap- 
parently simple  operation  of  cutting  metal 
is  really  affected  by  quite  a  large  number  of 
factors,  each  of  which  must  be  understood 
and  allowed  for  if  the  highest  efficiency  is  to 
be  realized. 

Operation,  as  has  been  pointed  out  in  a 
former  chapter,  is  the  function  in  which  the 
greatest  differences  exist  between  one  in- 
dustry and  another.  It  is  only  by  chance  that 
the  operative  methods  of  one  industry  can 
be  applied  to  another  industry.  All  the  other 
functions  must  obviously  have  common  prin- 


THE   FIRST   LAW   OF   EFFORT  125 

ciples,  because  in  all  industries  their  aims  or 
ends  are  precisely  similar,  but  the  technical 
operation  of  making  steel  rails  has  probably 
not  one  single  point  in  common  with  the 
making  of  silk  neckties.  The  end  in  view — 
namely,  rails — is  entirely  different  in  every 
respect  from  the  other  end  in  view — namely, 
neckties.  It  is  the  dissimilarity  of  aim,  and 
not  merely  the  nature  of  the  materials,  that 
makes  it  impossible  to  suppose  that  common 
ground  can  be  found  to  exist  in  industries  so 
wholly  dissimilar  as  those  suggested  in  the 
example  above. 

Nevertheless  this  does  not  prevent  the 
first  law  of  Effort  from  applying  to  Opera- 
tion in  the  fullest  degree.  If  we  wish  to  make 
neckties,  Ave  must  first  accumulate  all  the  ex- 
perience we  can  gather  on  the  various  opera- 
tions concerned.  So  with  any  other  product. 
Only  our  task  will  be  much  greater  in  one 
case  than  another.  To  master  thoroughly  all 
that  is  known  about  the  operation  involved 
in  the  making  of  dynamos  is  a  bigger  task 
than  it  is  to  master  all  that  is  known  about 
the  manufacture  of  steel  tanks.  But  the 
principle  is  the  same  in  both  cases ;  namely, 
to  accumulate  all  the  experience  possible,  to 
standardize  it,  and  apply  it. 


126      SCIENCE   AND   PRACTICE   OE   MANAGEMENT 

(f)     Application  of  Experience  in  Running 
a  Plant 

Thus  far  we  have  considered  mainly  the 
use  of  experience  in  organizing  or  setting  up 
the  various  functions  when  starting  a  plant. 
But  the  principle  applies  with  equal  force 
in  running  a  plant,  although  not  so  obviously, 
since  everyone  would  scout  the  idea  of  not 
starting  a  plant  on  the  best  known  lines, 
while  afterwards  there  is  a  tendency  to  con- 
sider that  experience  has  little  more  to  teach 
us.  While  therefore  the  application  of  the 
first  law  of  Effort  in  regard  to  new  plants 
is  merely  a  platitude  or  a  truism,  which  many 
people  will  not  think  worth  setting  down  on 
paper,  its  application  to  plants  in  operation 
is  a  different  matter.  In  every  one  of  the 
separate  fields  of  Effort  represented  by  the 
organic  functions,  progress  is  possible,  both 
on  our  own  part  and  on  the  part  of  other 
plants.  The  technical  side  of  any  industry 
is  not  alone  progressive;  progress  is  con- 
stantly being  made  in  the  organization  of 
all  the  functions — in  methods  of  Design,  in 
arrangement  of  Equipment,  in  means  of  Con- 
trol, in  processes  of  Comparison,  as  well  as 
in  the  technics  of  Operation.  Standards  on 
all  of  these  are  constantly  being  improved 


THE   FIRST   LAW    OF   EFFORT  127 

and  therefore   constantly  being  superseded 
by  new  and  higher  ones. 

WHERE    THEORY    TOUCHES    PRACTICE 

TABLE     VIII.       APPLICATION     OF     THE     FIRST    LAW    OF 
EFFORT 

The  Law: — Experience  must  be  systematically 
accumulated,  standardized  and  applied. 

In  Design.  Application  of  the  Law  to  the  func- 
tion of  Design  implies  that  all  similar  products 
should  be  scrutinized  and  their  advantages  and  de- 
fects analyzed.  Their  performance  or  value,  com- 
mercially, forms  a  standard  which  we  must  at  least 
equal.  In  Design  for  manufacture  experience  as  to 
the  character  of  the  operation  units,  and  as  to  what 
parts  are  purchasable,  which  are  stocked,  etc.,  must 
be  assimilated  by  the  designer.  This  information  is 
embodied  in  standards  of  designing  practice,  which 
should  become  traditional  in  that  office. 

In  Equipment.  In  installing  Equipment,  the 
experience  of  others,  or  of  oneself,  in  the  past  must 
be  drawn  on  so  that  the  most  perfect  types  of  appli- 
ance are  selected.  They  must  also  be  arranged  in 
the  most  efficient  way.  The  best  known  practice  of 
the  day  is  thus  a  standard  which  we  set  up  and 
follow,  and  must  later  supplement  and  improve  if 
possible.  In  administration  of  Equipment,  various 
standards  of  performance  for  such  equipment  exist, 
and  must  be  applied  regularly  and,  if  possible,  sur- 
passed. 

In  Control.  Experience  should  be  drawn  on 
when  settling  the  plan  of  Control,  but  true  standards 
of  Control  are  very  scarce.  Moreover,  Control  needs 
to  expand,  and  is  therefore  more  difficult  to  stand- 


128      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

ardize  than  the  other  functions.  Each  plant  can, 
however,  accumulate  experience  in  controlling  meth- 
ods for  itself,  and  thus  accomplish  a  measure  of 
self -adjustment.  Owing,  however,  to  the  difficult 
nature  of  the  task,  the  professional  adviser  will 
probably  always  find  his  largest  opportunity  in  this 
field. 

In  Comparison.  Comparison  employs  technical 
and  accounting  methods  in  the  selection  of  which 
experience  must  be  drawn  on.  Each  of  these  meth- 
ods then  becomes  a  standard  for  that  kind  of  work. 
The  selection  of  objects  for  Comparison — that  is, 
ivliat  must  be  compared — is  a  matter  very  far  from 
standardization  at  present.  Each  plant  can  accumu- 
late experience  for  itself  on  this  point. 

In  Operation.  The  existing  processes  of  Opera- 
tion in  the  given  industry  should  be  scrutinized  and 
the  best  methods  selected  at  starting.  Technical 
progress  in  some  industries  is  rapid.  The  law  of 
accumulation  of  experience  is  therefore  very  impor- 
tant in  this  function.  Operation  standards  are  sub- 
ject to  constant  improvement,  and  must  therefore 
be  the  subject  of  continual  observation  and  study. 

Ceaseless  vigilance  is  the  price  of  progress 
as  it  is  of  liberty.  The  first  law  of  Effort — 
that  Experience  must  be  systematically  ac- 
cumulated, standardized  and  applied — is 
merely  the  expression  of  this  truth  in  an- 
other and  more  complete  form,  since  the  ac- 
tual use  of  experience  is  the  important  thing. 
But  the  foregoing  arguments  will  have  been 
presented  to  little  purpose  if  it  is  not  obvious 


THE   FIRST   LAW    OF   EFFORT  129 

that  what  we  have  to  do  is  not  merely  and 
generally  to  accumulate  Experience,  but  that 
this  experience  must  be  of  five  different  and 
independent  kinds,  gathered  from  different 
fields,  and  indeed  gathered  and  applied  by 
different  persons  for  the  most  part ;  namely, 
experience  as  to  Design,  as  to  Equipment,  as 
to  methods  of  Control,  as  to  ways  of  Com- 
parison, and  as  to  technical  Operation. 

This,  perhaps,  is  the  first  striking  applica- 
tion of  the  organic  basis  of  Administration — 
the  recognition  that  our  organic  functions 
are  not  merely  nomenclature,  but  that  they 
embody  five  different  hinds  of  experience, 
which  must  be  both  gathered  and  applied  in- 
dependently. Here  we  descend  from  the  ab- 
stract to  the  practical  in  a  breath,  we  observe 
that  our  functions  correspond  to  something 
real,  something  in  the  nature  of  things,  which 
like  all  natural  facts  is  worthy  of  attention. 
Applying  the  first  law  of  Effort  to  these  func- 
tions in  turn,  we  see  that  though  it  applies  to 
all,  it  produces  different  results  in  each.  In 
each  it  creates  a  new  store  of  knowledge, 
new  materials  for  progress ;  but  these  stores 
and  these  materials  are  of  quite  different 
nature  in  each  function,  and  have  their  appli- 
cation in  quite  different  fields. 


Chapter  VII 

PEACTICAL  APPLICATION  OF  THE  SECOND 
LAW  OF  EFFOET 

'T*  HE  second  law  of  Effort  deals  with  the 
A  Division,  Co-ordination,  Conservation 
and  Benxuneration  of  Effort,  or  more  gener- 
ally, with  its  regulation  in  the  economic 
sense.  This  may  be  described  as  the  motor 
principle  of  Effort,  inasmuch  as  it  deals  with 
effort  in  action — effort  actually  engaged  in 
performing  work.  The  first  law,  "the  ac- 
cumulation and  application  of  experience", 
is  obviously  static  or  preparatory  in  its  na- 
ture; the  second  law,  "regulation  of  Effort", 
is  just  as  obviously  active  and  dynamic.  As 
each  organic  function  has  its  own  special 
purpose,  the  law  will  apply  to  each  of  them 
in  a  different  way  and  the  consequent  re- 
actions will  obviously  be  somewhat  complex. 
Nevertheless  as  the  second  law  of  Effort  is 
the  most  important  of  all,  its  action  must  be 
very  carefully  studied. 

Before  considering  the  specific  working  of 
the  law  within  each  organic  function  it  is 

130 


THE   SECOND  LAW   OF   EFFORT  131 

desirable  to  consider  the  tendency  of  each 
sub-principle  in  the  abstract.  These  tenden- 
cies may  be  briefly  summarized  as  follows : — 

Division  is  the  analytical  principle.  It  de- 
cides the  nature  of  the  units  to  which  Effort 
is  to  be  applied,  and  thus  determines  the  di- 
rection of  Effort. 

Co-ordination  is  the  synthetical  principle. 
It  requires  that  all  the  divided  units  of  Ef- 
fort, taken  together,  shall  amount  to  the  re- 
sult desired,  exactly,  i.  e.,  without  either  gap 
or  overlap. 

Conservation  is  the  quantitative  principle. 
It  demands  that  for  the  given  purpose  the 
minimum  amount  of  Effort  should  be  used. 
It  seeks  to  eliminate  wasteful  methods. 

Remuneration  has  to  do  with  ascertain- 
ing, in  each  organic  function,  what  is  the 
particular  feature  of  Effort  that  is  to  be  en- 
couraged and  rewarded.* 

Each  of  these  ways  of  regulating  Effort 
has  application  in  each  of  the  organic  func- 
tions, and  no  function  can  be  considered  as 
correctly  organized  unless  the  application  of 

*  The  form  of  the  incentive  (bonus,  premium,  etc.)  be- 
longs to  the  general  subject  of  Incentives  to  Effort.  See 
third  law  of  Effort — the  '' '  Promotion  of  Personal  Effective- 


132     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

each  of  the  sub-principles  of  the  law  has  re- 
ceived due  attention. 

(i)     Effort  Must  Be  Divided 

The  idea  of  division  of  labor,  meaning, 
for  the  most  part,  operative  labor,  is  an 
old  and  familiar  one.  It  is  generally  recog- 
nized as  a  predominant  factor  in  industry, 
and  a  large  share  of  modern  industrial  prog- 
ress is  usually  attributed  to  the  growing  de- 
velopment of  this  principle.  The  term  "di- 
vision of  Effort"  has,  of  course,  a  wider  ap- 
plication than  that  usually  implied  in  the 
use  of  the  older  phrase.  It  applies  to  all  the 
organic  functions  and  not  merely  to  opera- 
tion. It  is  easy  to  picture  Product  reduced 
to  ultimate  units  (parts  or  components)  or 
Operation  reduced  to  unit  processes  of  mi- 
nute sub-division,  but  these  are  only  a  small 
part  of  the  practical  applications  of  the  di- 
vision of  Effort.  The  latter  applies  not  only 
to  things  that  we  can  see  and  handle,  but  also 
to  mental  tasks,  to  duties,  to  the  spheres  of 
personal  relationship  in  a  system  of  admin- 
istration, and  in  short,  to  the  work  of  each 
and  every  function. 

Division  of  Effort  is  the  analytical  sub- 
principle  of  the  second  law  of  Effort  which 


THE    SECOND   LAW    OF    EFFORT  133 

demands  that  "Effort  must  be  economically 
regulated".  In  practice  it  implies  that  all 
activity  should  be  divided  into  units  of 
"simplest  skill".  In  each  organic  function 
we  must  seek  such  units,  and  in  each  they 
will  necessarily  be  of  a  different  kind.  But 
while  the  division  of  labor  is  a  comparatively 
easy  matter  to  compass,  for  reasons  which 
will  appear  when  we  discuss  Operative  Ef- 
fort, the  division  of  Effort  in  the  other  func- 
tions is  a  more  difficult  matter.  We  must 
never  lose  sight  of  the  fact  that  division  of 
Effort  by  itself  means  very  little.  It  re- 
quires to  be  corrected  or  controlled  by  sub- 
sequent application  of  co-ordination  and  con- 
servation before  an  efficient  regulation  of  Ef- 
fort is  arrived  at  in  any  function. 

Division  of  Effort  in  Design. — Division  of 
the  act  of  design  is  only  possible,  or  at  any 
rate  only  realizable  in  practice  for  the  most 
part,  by  subdividing  the  object  of  design,  or 
in  other  words  the  Product.  While  no  doubt 
a  certain  amount  of  collaboration  in  design- 
ing is  possible,  this  will  depend  so  entirely 
on  particular  instances  that  it  cannot  be  con- 
sidered as  a  matter  of  administrative  science. 
We  cannot  lay  down  any  rules  on  the  subject, 
for  the  obvious  reason  that  the  inventive  f ac- 


134     SCIENCE   AND    PRACTICE    OF   MANAGEMENT 

ulties  have  laws  of  their  own,  which  few  men 
understand  even  in  their  own  case.  Practi- 
cally, therefore,  when  we  speak  of  division  of 
effort  as  applied  to  design,  we  refer  to  ulti- 
mate units  of  product  and  not  to  ultimate 
acts  of  design. 

In  speaking  of  Design  throughout  this  dis- 
cussion, it  must  also  be  remembered  that  de- 
sign for  manufacture  is  alone  referred  to. 
As  pointed  out  in  Chapter  II,  the  efficiency 
of  any  design  for  technical  use,  e.  g.  the 
efficiency  of  a  particular  design  of  pump  for 
pumping  purposes,  or  the  efficiency  of  a  par- 
ticular design  of  printing  press  for  three- 
color  work,  is  entirely  outside  the  science  of 
manufacturing  management.  It  is  purely  a 
matter  of  technology.  The  sphere  of  work 
embraced  in  this  discussion  is  that  of  effi- 
ciency of  manufacturing  alone.  Now  the 
pump  and  the  press  may  be  technically  suc- 
cessful or  they  may  not,  but  whether  they  are 
or  are  not,  the  question  of  their  economical 
manufacture  is  obviously  an  entirely  sepa- 
rate matter.  The  science  of  manufacturing 
management  will  point  out  the  way  to  make 
any  product  whatever,  in  the  most  economi- 
cal way,  consistent  with  the  technical  knowl- 
edge available;  but  it  will  not  add  a  hair's 


THE   SECOND   LAW    OF   EFFORT  135 

breadth  to  that  knowledge.  The  most  per- 
fect manufacture  will  not  enable  the  pump 
or  the  press  to  excel  its  competitors  in  tech- 
nical value — that  will  depend  entirely  on 
whether  its  technological  principles  are  cor- 
rect, or  in  other  words  upon  its  design  for 
use. 

So  many  persons  confuse  management 
with  technology  that  the  difference  between 
them  cannot  be  too  often  insisted  upon.  A 
man  having  the  habit  of  authority,  and  a 
profound  experience  of  human  nature  may 
become  in  turn  a  successful  military  officer, 
and  a  prosperous  lawyer  or  man  of  business, 
but  the  technology  of  the  arts  of  war  and 
of  peace  are,  notwithstanding,  very  different. 
His  success  will  be  in  proportion  as  he  car- 
ries over  from  the  one  pursuit  to  the  other, 
just  those  fundamental  powers  of  under- 
standing and  persuading  or  controlling  men 
which  are  independent  of  any  technology. 

So  in  the  industrial  field,  the  technology 
involved  in  the  operations  of  each  industry 
differs  greatly;  it  even  differs  to  a  consider- 
able degree  between  plants  in  the  same  in- 
dustry. But  the  art  of  management  rests 
on  the  same  foundations  in  all  industries.  If 
it  were  not  so,  no  man  could  be  successful  in 


136     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

more  than  one  industry  as  a  manager,  yet  the 
contrary  is  proved  every  day.  A  man  can- 
not carry  in  his  head  more  than  two  or  three 
separate  technologies,  but  he  can  control  sev- 
eral quite  distinct  kinds  of  plant,  because  he 
carries  over,  unconsciously  for  the  most  part, 
principles  of  action  which  are  common  to  all 
plants,  and  applies  them  to  the  special  cases 
as  he  meets  with  them.  This  book  is  an  at- 
tempt to  reduce  these  common  principles  of 
the  art  of  administration  to  definite  knowl- 
edge. It  will  therefore  be  obvious  that  ques- 
tions of  technology  do  not  properly  enter 
into  it. 

Division  of  Effort  in  Design^  then,  relates 
to  the .  splitting  up  of  Product  into  ultimate 
units  for  manufacture.  We  have  seen  that 
at  its  fullest  development  design  for  manu- 
facture frequently  comprises  three  distinct 
acts  with  regard  to  the  same  piece  or  com- 
ponent. There  is  design  of  the  part  itself, 
of  the  special  appliances  by  which  it  is  to  be 
made,  and  specification  of  the  standard 
routine  of  Operation. 

As  regards  each  unit  of  Product,  the  proc- 
esses by  which  it  is  to  be  made  must  coin- 
cide exactly  with  units  of  Operation  (See 
later).    In  many  industries  this  is  a  simple 


THE    SECOND   LAW    OE    EFFORT  137 

matter,  since  no  alternative  ways  of  doing 
anything  exist.  In  other  industries,  as  in 
engineering  manufacture,  there  may  be  many 
ways  of  attaining  the  same  result,  and  the 
selection  of  one  or  other  may  depend  upon 
conditions  well  within  the  sphere  of  the  de- 
signer to  vary.  The  application  of  the  prin- 
ciple of  division  of  Effort  to  Design  has,  as 
its  most  significant  feature,  the  necessity  of 
keeping  in  mind,  while  the  design  of  any  part 
or  component  is  going  on,  exactly  how  it  is 
to  be  manufactured.  This,  of  course,  im- 
plies the  picturing  of  each  kind  of  Effort  that 
will  subsequently  be  necessary  to  produce  it. 
And  this,  in  turn,  means  that  the  designer 
will  seek  to  keep  such  subsequent  Effort  in 
as  simple  a  form  as  possible. 

Division  of  Effort  in  Design  means,  then : 
(1)  analysis  of  the  Product  into  simplest 
parts  or  components;  (2)  applying  the  units 
of  Operation  (i.  e.,  processes)  to  each  part  in 
the  most  direct  way;  (3)  simplifying  such 
application  of  processes  by  special  means  if 
necessary,  such  as  providing  lugs  or  ears  for 
holding  while  under  operation,  or  special 
holding  devices,  jigs  and  so  forth. 

Division  of  Effort  in  Equipment.  As  re- 
gards Equipment  it  will  be  evident  that  the 


138     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

units  to  be  sought  are  wholly  different  from 
those  of  Design.  Equipment  is  the  organic 
function  that  provides  conditions  prelimin- 
ary to  manufacture.  It  has  to  do  with  build- 
ings, and  the  utilization  of  their  space  eco- 
nomically; with  the  provision  of  adequate 
power  plant;  and  with  craneage,  transport- 
ing and  conveying  appliances.  Further  it 
has  to  maintain  all  these  things  as  "serv- 
ices" to  production,  so  that  favorable  condi- 
tions for  manufacture  may  not  merely  be  in- 
stalled but  kept  up.  Finally  it  is  responsible 
for  the  maintenance  and  repair  of  the  opera- 
tive equipment  itself,  and  for  the  keeping  of 
the  whole  plant  in  running  condition. 

Primitively,  it  will  be  remembered,  an  l '  odd 
man"  of  a  mechanical  turn  attended  to  all 
these  matters.  That  is  as  far  as  they  re- 
ceived any  systematic  attention  at  all,  in 
primitive  conditions  of  industry — and  in 
some  industries  that  would  feel  insulted  if 
that  appellation  were  applied  to  them,  the 
problem  is  greatly  simplified  by  attending 
to  nothing  until  a  breakdown  or  interruption 
of  some  kind  occurs.  But  in  large-scale 
manufacturing  we  cannot  afford  to  leave 
things  to  look  after  themselves  in  this  way, 
and  as  the  field  of  Equipment  is  a  large  one, 


THE   SECOND  LAW   OF   EFFORT  139 

division  of  Effort  becomes  a  very  obvious 
necessity. 

The  problem  of  Equipment  has  two  sides, 
its  installation  and  its  current  working.  As 
a  matter  of  strict  accuracy,  all  the  organic 
functions  should  be  treated  from  these  two 
points  of  view.  Each  has  to  be  installed  and 
also  conducted  as  a  going  concern.  But  most 
of  the  functions  are  more  fluid  than  Equip- 
ment ;  they  are  made  up  of  persons  and  their 
relations  rather  than  things,  so  that  to  dwell 
on  their  installation  is  hardly  .necessary  in 
an  elementary  manual.  But  Equipment  is 
so  obviously  linked  up  with  heavy  material 
objects  that  the  problems  of  their  installa- 
tion and  their  use  become  almost  equally  im- 
portant. In  fact  we  could  hardly  deal  satis- 
factorily with  the  latter  without  considering 
the  former. 

Space  or  area,  power,  and  transport  are 
the  three  principal  features  of  the  installa- 
tion of  equipment,  outside  the  operative 
equipment  itself.  Division  of  Effort  in  re- 
gard to  these  means  the  apportionment  to 
particular  uses,  of  the  space  available,  in- 
stallation of  equipment  for  the  generation 
and  transmission  of  power  to  the  points 
wanted,  the  arrangement  of  storage  and 
transport  appliances  in  the  right  places. 


140      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

Administratively,  or  in  regard  to  the. cur- 
rent nse  of  Equipment,  division  of  Effort  is, 
again,  into  units  of  simplest  skill.  The 
broadest  division  will  be  into  " services' •  cor- 
responding with  the  prime  kinds  of  Equip- 
ment. 

Thus  one  such  prime  "service"  will  take 
care  of  the  buildings,  their  repair  and  clean- 
ing; another  will  be  occupied  with  running 
the  power,  lighting,  heating  and  ventilation ; 
another  with  operating  the  transport  appli- 
ances ;  while  still  another  will  be  devoted  to 
keeping  tne  mechanical  equipment  of  all 
kinds  in  repair.  In  some  cases  a  special  de- 
partment might  be  concerned  with  making 
and  installing  new  machines  and  equipment, 
but  this  is  rather  an  offshoot  than  a  regular 
part  of  administrative  activity. 

In  large  plants,  the  division  of  Effort 
would  be  carried  much  further  than  this. 
Special  men  would  be  told  off  to  maintain 
belts,  others  to  look  after  motors,  others 
again  to  oil  and  maintain  shafting,  and  so 
forth.  The  farther  such  subdivision  can  be 
carried,  as  long  as  it  is  not  forced,  the  more 
efficient  is  the  result  likely  to  be. 

Generally  speaking  the  division  of  Effort 
in  the  use  of  Equipment  means  the  special- 


THE    SECOND  LAW    OF   EFFORT  141 

ized  care  of  particular  conditions.  It  begins 
by  an  analysis  of  the  elements  of  these  con- 
ditions, and  applies  separate  and  appropri- 
ate effort  to  each.  If  successfully  applied  it 
means  that  conditions  are  kept  uniform. 
This  is  by  no  means  a  matter  of  course  in 
practice,  at  the  present  time. 

Division  of  Effort  in  Control.  Control,  like 
Equipment,  has  a  side  so  entirely  antecedent 
to  current  administration  that  it  must  be 
treated  separately.  The  installation  of  Con- 
trol is  an  obviously  different  matter  from  its 
daily  routine.  Installation  of  Control  is  in 
fact  a  very  delicate  problem,  quite  as  much  so 
as  is  the  proper  choice  and  arrangement  of 
Equipment.  In  both  cases  the  mechanism 
must  be  installed  before  it  can  be  worked. 

Division  of  effort  in  Control  means  the 
analysis  of  personal  duties  throughout  the 
plant.  These  duties,  once  more,  must  be  re- 
duced to  units  of  simplest  skill,  as  far  as  pos- 
sible. We  must  begin  by  considering  the  ele- 
mentary facts  of  Control,  and  then  group 
these  in  a  hierarchy,  or  system  of  subordina- 
tion, so  that  at  each  stage  the  degree  of  super- 
vision required  represents  a  definite  grade  of 
qualification,  neither  more  or  less  than  is  nec- 
essary. 


142      SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

Having  done  this,  and  arranged  or  mapped 
out  the  personal  relations  of  staff  (for  it  is 
by  setting  np  correct  personal  relations  that 
Control  is  exercised  and  maintained)  the  cur- 
rent or  administrative  side  of  Control  may  be 
considered.  In  practice  this  has  to  do  with 
the  routine  handling  of  Orders.  A  diagram 
of  the  personal  relations  of  the  staff  may  be 
likened  to  the  map  of  a  watershed,  with  all 
its  rivers,  streams,  tributaries,  canals  and 
estuary;  and  Orders  may  be  likened  to  the 
water  that  flows  through  these  various  chan- 
nels. The  rivers  and  streams  are  there  for 
the  purpose  of  conducting  water.  The  sys- 
tem of  Control  is  there  for  the  purpose  of 
transmitting  and  giving  effect  to  orders.  Di- 
vision of  effort  in  this  department,  has,  then, 
to  do  with  the  analysis  and  dissection  of  or- 
ders and  their  transmission  to  all  concerned, 
in  such  a  way  that  each  attends  to  his  own 
particular  duty  with  regard  to  each  order. 

Division  of  Effort  in  Comparison  means 
the  setting  up  of  comparison  units.  The 
nature  of  these  will  vary  with  the  type  of 
industry.  Generally  speaking,  they  are  the 
elementary  facts  of  Operation  and  records  of 
the  routine  work  of  the  other  functions.  The 
most  obvious  example  of  the  former  is  the 


THE  SECOND  LAW  OF  EFFORT        143 

Time  Sheet,  or  in  other  words  the  record  of 
how  each  man  has  been  occupied,  what  he  has 
done  and  how  long  he  took  to  do  it.  The  next 
most  obvious  unit  fact  of  Comparison  is  the 
consumption  of  material,  what  material  it 
was,  what  it  was  used  for,  and  how  much 
was  used. 

These  trite  illustrations  are  introduced  for 
the  purpose  of  calling  attention  to  the  fact 
that  the  units  of  Comparison  are,  for  the 
most  part,  complex  units.  They  are  records 
of  single  transactions,  or  should  be,  but  more 
than  one  thing  is  required  to  be  known  about 
each  such  transaction.  This  is  very  little  un- 
derstood, with  a  result  on  the  one  hand  of 
frequent  inefficiency  in  accounting,  and  on 
the  other,  needless  complexity  of  system  due 
to  the  right  facts  about  unit  transactions  not 
having  been  recorded  at  the  time  of  their  oc- 
currence. 

The  units  of  Comparison  are  then,  trans- 
actions; and  the  whole  art  of  Comparison 
rests  on  making  the  right  kind  of  record 
about  them.  Unfortunately,  while  a  great 
deal  of  attention  has  been  devoted  to  methods 
of  working  up  supposed  unit  facts,  and  their 
presentation  in  tabular  statements,  returns 
and  reports,  very  little  study  has  been  given 


144      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

to  the  question  of  how,  why,  and  when  to  ob- 
tain them  at  their  source.  Yet  this  is  the 
really  important  point.  Unless  these  Com- 
parison units  are  accurately  collected  at  the 
time  of  the  transaction,  but  little  reliance  can 
be  placed  on  the  results  of  their  working  up 
into  statistics. 

Comparison  units  are  of  two  kinds,  those 
relating  to  quantities  and  values,  and  those 
relating  to  properties  and  dimensions.  Eec- 
ord  and  verification  of  these  latter  is  usually 
called  testing  and  inspection.  The  units  con- 
cerned are  wholly  dependent  on  technical  con- 
siderations, and  need  not  be  discussed  further 
here. 

Division  of  Effort  in  Operation.— In  Oper- 
ation the  units  of  division  are  usually  skills 
or  trades,  generally  but  not  always  repre- 
sented by  the  operation  of  a  machine.  In 
other  words  they  are  processes.  To  manu- 
facture a  product  we  require  a  succession  of 
processes,  and  when  these  are  subdivided 
into  elements  of  simplest  skill  as  far  as  pos- 
sible, units  of  Operation  result.  The  work 
of  Design,  as  mentioned  above,  must  always 
be  in  strict  agreement  with  these  units  of 
Operation.  The  tendency  in  Operation  is  al- 
ways towards  further  and  further  division  of 


THE   SECOND   LAW    OF    EFFORT  145 

effort  into  forms  of  less  and  less  skill.  The 
ultimate  tendency  of  this  is  towards  the  elim- 
ination of  operative  skill  altogether,  and  its 
embodiment  in  a  machine.  (See  axiom  I, 
Appendix  V).  In  some  industries  this  has 
practically  been  accomplished,  no  operative 
skill  being  left.  In  others,  as  in  shoe-making, 
division  has  been  carried  to  a  high  degree, 
but  considerable  specialized  skill  is  required 
to  work  some  of  the  machines  effectually. 

Table  ix.     Application  of  the  Second  Law  of 

Effort. 

Sub-section  i.     Effort  Must  Be  Divided 

The  second  Law  of  Effort  has,  as  its  first  sub- 
section, the  analytical  principle  that  Effort  must  be 
Divided.  This  implies  that  all  work-  must  be  ana- 
lyzed into  units  of  "simplest  skill".  In  each  organic 
function  this  sub-principle  of  the  law  delimits  the 
units  to  which  Effort  is  to  be  applied,  and  thus  deter- 
mines the  direction  of  Effort. 

In  Design:— Means  subdivision  of  the  object  of 
design,  viz.: — Product.  Means,  therefore,  analysis  of 
Product  into  simplest  parts  or  components.  On 
each  of  these  parts  Operation  has  to  be  undertaken, 
and  therefore  design  of  parts  must  keep  in  view  the 
nature  of  operation  units.  When,  further,  the  rou- 
tine of  operation  is  specified  in  advance,  it  must  be 
specified  strictly  in  terms  of  operation  units.  The 
application  of  processes  must  be  facilitated  where 
possible  by  modifying  design  to  allow  direct  and 
simple  operation.  Design  -for  manufacture  has  no 
relation  to  technological  efficiency  of  the  complete 
Product. 


146      SCIENCE   AND    PRACTICE    OF   MANAGEMENT 

In  Equipment: — (1)  Installation  means  appor- 
tionment of  space  available,  and  analysis  of  the  dif- 
ferent kinds  of  equipment-service  that  will  be  re- 
quired. (2)  Administration.  Division  of  the  ser- 
vices of  Equipment  into  units  of  simplest  skill — 
special  men  being  assigned  as  far  as  practicable  to 
special  duties,  such  as  care  of  belts,  motors,  shaft- 
ing, cleaning,  repairs  of  different  classes,  and  so 
forth. 

In  Control : —  ( 1 )  Installation  means  allotment  of 
duties  in  units  requiring  simplest  qualifications  for 
each.  This  applies  all  the  way  up.  Each  duty 
should  represent  a  definite  grade  of  qualification, 
neither  more  nor  less  than  is  really  necessary.  (2) 
Administration  implies  the  dissection  of  orders  into 
units  corresponding  exactly  with  the  work  to  be  done 
on  them  by  the  various  organic  functions  and  their 
internal  subdivisions. 

In  Comparison: — Means  the  definition  of  what 
are  the  units  requiring  measurement  and  record. 
They  are  found  to  be  transactions,  but  about  each 
transaction  more  than  one  fact  is  generally  required 
to  be  known.  Comparison  units  are,  therefore,  com- 
plex units,  and  on  their  accurate  delimitation  the 
success  of  the  accounting  costs  will  depend.  On  the 
technical  side,  Inspection  units  are  dependent  on 
specifications  of  a  wholly  technical  nature  peculiar  to 
each  industry.  In  some  cases  they  imply  accurate 
measurement,  and  in  others  chemical  analysis,  at 
various  stages  of  manufacture. 

In  Operation: — Operation  is  the  exercise  of  man- 
ual trades  and  skills,  including  the  manipulation  of 
machines.  To  manufacture,  all  the  necessary  trades 
and  skills  must  be  present,  and  the  exact  sphere  of 
action  of  each  fully  understood.  Design  must  spec- 
ify its  working  instructions   in  terms  of  the  trades 


THE    SECOND   LAW    OF   EFFORT  147 

and  skills  existing  in  the  plant.  Division  of  Effort 
in  operation  means  the  use  of  methods  requiring  the 
(successive)  application  of  simple  skill,  and  the  elim- 
ination as  far  as  possible  of  methods  requiring  rare 
and  high-priced  skill. 

'Remarks  on  Division  of  Effort. — We  have 
now  passed  in  review,  briefly,  the  influence  of 
division  of  Effort  on  the  activities  exercised 
in  the  five  organic  functions.  Most  of  these 
influences  will  be  familiar,  because  the  idea 
of  division  of  Effort  is  fairly  well  under- 
stood, especially  in  regard  to  labor  itself.  It 
will  be  seen  however  that  the  principle  is  by 
no  means  limited  to  the  division  of  labor,  its 
units  are  not  all  labor  units.  In  each  func- 
tion the  principle,  applied  to  the  work  of 
that  function,  gives  rise  to  a  different  kind 
of  unit,  this  unit  being  the  ultimate  practical 
division  of  that  kind  of  work. 

Having  observed  the  influence  of  division 
of  Effort  we  shall  now  pass  to  a  much  less  un- 
derstood principle,  that  of  co-ordination  of 
Effort.  This  has  already  been  defined  as  the 
converse,  or  even  as  the  antidote  to  Division. 
The  latter  is  an  easy  and  familiar  process, 
but  it  needs  to  be  safeguarded  by  attention 
to  the  principle  of  co-ordination,  to  be  eco- 
nomically efficient. 


148      SCIENCE   AND    PEACTICE    OF    MANAGEMENT 

(2)  Effort  Must  Be  Co-ordinated 
Application  of  the  sub-principle,  that  * '  Ef- 
fort must  be  co-ordinated",  assists  us  in 
safeguarding  against  the  danger  of  "gaps 
and  overlaps",  arising  out  of  the  original 
necessity  to  subdivide  Effort.  This  danger 
is  always  present  when  Effort  is  divided, 
and  is  equally  present  in  regard  to  all  the 
five  organic  functions. 

Co-ordination  of  Effort  in  Design. — The 
importance  of  co-ordination  in  regard  to  De- 
sign will  be  great  in  proportion  as  there  has 
been  great  division  into  components  or  units 
of  Design.  In  some  industries  there  is  very 
little  danger  of  "gaps  or  overlaps";  in  other 
industries  there  is  considerable  danger.  In 
a  chemical  industry,  for  example,  such  as 
soap  manufacture,  the  adoption  of  a  new 
formula  (which  occupies  the  place  of  a  de- 
sign) might  or  might  not  imply  new  divi- 
sion of  Effort ;  that  is,  it  might  or  might 
not  employ  exactly  the  same  machinery  and 
stages  of  process,  but  there  could  hardly  fail 
to  be  complete  co-ordination,  because  if  there 
were  not,  some  different  product  from  what 
was  intended  would  result.  That  is,  as  far 
as  the  chemical  part  of  the  process  of  manu- 
facture is  concerned.     On  the  other  hand  it 


THE  SECOND  LAW  OF  EFFORT        149 

might  possibly  happen  that  the  new  product 
had  characteristics  that  would  prevent  it  be- 
ing handled  freely  by  the  subsequent  print- 
ing, cutting  and  packeting  machines,  and  in 
that  case  a  true  want  of  co-ordination  of  de- 
sign would  be  reached,  -. 

In  mechanical  industry  on  the  other  hand, 
"gaps  and  overlaps" -are  of  frequent  occur- 
rence, and  co-ordination,  instead  of  being  al- 
most obvious,  requires  minute  precautions  to 
bring  it  about  successfully.  In  practical 
language  this  means  attention  to  the  ques- 
tion of  "limits,  fits  and  tolerances"  as  re- 
gards each  unit.,  In  mass  production,  or  any 
production  where  the  same  article  is  made 
over  and  over  again,  the  elimination  of  im- 
perfect co-ordination  should  reach  a  very 
high  standard,  if  the  cost  of  extra  fitting  and 
hand  work  on  unit  parts  is  carefully  recorded 
and  scrutinized,  since  this  will  point  out  just 
what  parts  are  in  need  of  more  accurate 
specification  of  limits  and  tolerances.  But 
this  practical  application  of  the  first  law— 
"the  accumulation  and  application  of  experi- 
ence"—is  not  always  made  in  the  right  way. 
Frequently,  the  co-ordination  is  brought 
about  by  what  may  be  called  "unofficial" 
means,  by  one  man  telling  another  to  allow 


150     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

a  thousandth  here  or  a  sixty-fourth  there, 
and  the  practice  of  doing  this  then  becomes 
one  of  the  traditions  of  the  shop,  one  of  the 
subtle  "secrets"  of  operation,  possession  of 
which  sometimes  "puffs  up"  the  possessor. 

This  by  no  means  imaginary  case  illus- 
trates the  process  by  which  "vested  inter- 
ests ' '  grow  up  in  a  plant,  and  how  some  very 
wise  shop  official  has  ultimately  to  be  ap- 
pealed to  in  cases  where  the  executive  should 
be  intimately  in  touch  with  the  matter  in 
dispute.  It  goes  without  saying  that  want 
of  co-ordination  of  units  is  an  expensive  fault, 
not  only  in  its  direct  consequences  of  extra 
expense  in  fitting,  but  in  disturbance  of 
routine,  and  in  the  setting  up  of  arbitrary 
standards  of  manufacture. 

The  right  way  to  cure  imperfect  co-ordina- 
tion of  Design  is  to  scrutinize  all  dimensional 
relations  of  the  unit  part  as  carefully  as  pos- 
sible to  begin  with,  and  then  to  correct  and 
modify  these  dimensions  on  the  drawing  from 
time  to  time  as  experience  suggests.  In  other 
words  the  practical  shop  experience  of  the 
necessities  of  Co-ordination  should  be  incor- 
porated in  corrected  design,  and  not  left  to 
become  an  arbitrary  and  obstinate  tradition 
in  the  shop. 


THE  SECOND  LAW  OF  EFFORT        151 

Co-ordination  of  Effort  in  Equipment — 
In  regard  to  Installation  of  Equipment,  Co- 
ordination implies  a  correct  balance  of  the 
different  kinds.  Each  kind  must  be  present 
in  the  right  proportion  and  in  the  right  quan- 
tity. Each  Department  must  also  be  allotted 
the  proportional  amount  of  space  fitted  to 
its  needs.  These  matters  are  generally  given 
attention  when  a  new  plant  is  being  started 
up,  though  even  then,  too  little  attention  is 
frequently  given  to  the  subsidiary  depart- 
ments and  equipment,  such  as  storage  equip- 
ment, convenient  and  well-planned  methods 
of  handling  product,  etc.  But  the  most  fre- 
quent fault  in  installation  of  the  organic  func- 
tion of  Equipment  is  disregard  of  the  prob- 
able necessity  for  expansion.  It  is  too  fre- 
quently overlooked  that  an  increase  in  busi- 
ness will  bring  in  its  train  expansion  of  the 
subsidiary  departments  as  well  as  the  shops. 
The  result  of  this  is  often  disastrous. 

It  is  not  sufficient  to  enlarge  the  function 
of  Operation  alone  when  business  expands. 
If  the  different  sections  of  Equipment  were 
correctly  balanced  at  the  beginning,  it  is  evi- 
dent that  increase  in  output  will  disturb  that 
balance.  The  practical  result  of  this  is,  fre- 
quently, that  the  subsidiary  Equipment  be- 


152      SCIENCE   AND   PEACTICE   OF   MANAGEMENT 

comes  overtaxed.  Power  supply  becomes  in- 
adequate, storage  facilities  are  over-crowded, 
product  accumulates  in  nodes  instead  of  run- 
ning in  a  continuous  stream.  The  era  of 
errors,  vexation,  and  confusion  not  infre- 
quently sets  in  after  an  expansion  has  been 
made  in  the  operative  department  simply  be- 
cause the  various  kinds  of  Equipment  are  no 
longer  in  exact  co-ordination. 

The  proper  balance  of  the  operative  equip- 
ment itself  must  also  be  considered  here. 
What  we  have  already  said  as  to  the  balance 
of  Equipment  generally,  applies  in  full  force 
to  operative  equipment.  To  begin  with,  the 
due  proportion  of  the  various  machines, 
benches  and  assembly  floors  must  be  worked 
out  with  exactitude.  But  though  this  is  usu- 
ally done,  the  troublesome  problem  of  growth 
is  usually  settled  by  being  disregarded.  One 
fatal  result  of  this  is  very  often  found  by 
industrial  engineers  when  examining  a  plant, 
namely  the  placing  of  new  machines  rendered 
necessary  by  the  expansion  of  the  business, 
in  all  sorts  of  corners  and  odd  places.  This 
means  that  even  if  the  path  of  travel  of  the 
work  was  originally  direct  and  efficient,  it 
has  become  irregular  and  inefficient,  with  re- 
sulting confusion,  worry  and  loss  of  time. 


THE  SECOND  LAW  OF  EFFORT         153 

The  path  of  travel  of  product,  which  was 
originally  without  gap  or  overlap,  gradually 
comes  to  look  like  one  of  the  lines  traced  by 
the  pendulum  of  an  oscillograph. 

Administratively,  the  co-ordination  of  ef- 
fort in  the  function  of  Equipment  implies 
that  the  various  indirect  services  arising  out 
of  this  function  are  balanced  also.  Equip- 
ment in  its  administrative  aspect  provides 
current  or  daily  and  hourly  conditions;  it 
is  responsible  for  power  supply,  for  main- 
tenance of  temperature  and  purity  of  atmos- 
phere, for  lighting,  for  sanitation,  for  tire 
protection,  and  for  the  upkeep  of  plant  and 
machinery  of  every  kind  in  a  condition  of 
working  efficiency.  It  is  evident  therefore 
that  co-ordination  of  effort  as  regards  the 
services  of  Equipment  must  have  consider- 
able bearing  on  success.  The  right  kind  of 
service  must  be  applied  in  the  right  place 
at  the  right  time. 

This  is  not  a  very  easy  matter  in  some 
cases.  All  the  services  of  Equipment  par- 
take of  the  nature  of  the  much  dreaded  ' '  Ex- 
pense Burden".  There  is  a  natural  tendency 
to  curtail,  if  not  to  starve  them.  Yet  it  is  evi- 
dent that  all  these  services  must  be  suffi- 
ciently  developed   to   answer   all   demands. 


154     SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

For  if  not,  then  one  or  more  of  these  condi- 
tions will  become  unfavorable  conditions,  and 
will  hinder  fullest  production.  The  plant  in 
which  something  is  always  going  wrong,  in 
which  stoppages  due  to  breakdowns  of  one 
Kind  or  another  are  frequent,  in  which  dis- 
comfort reigns,  are  examples  of  plants  in 
which  the  co-ordination  of  the  services  of 
Equipment  has  been  neglected,  and  the  im- 
portance of  perfect  balance  overlooked. 

Co-ordination  of  Effort  in  Control. — In 
the  Installation  of  Control,  co-ordination 
plays  a  very  important  part.  In  Equipment, 
as  we  have  seen,  a  perfect  balance  of  physi- 
cal conditions  is  implied.  Similarly,  in  Con- 
trol we  find  that  co-ordination  means  a  per- 
fect balance  of  personal  duties, — without 
"gap  or  overlap".  And  just  as  we  saw  that 
in  Equipment  growth  of  business  has  a 
tendency  to  upset  this  balance,  so  in  Con- 
trol the  same  phenomena  are  observable.  A 
system  of  Control  that  is  well  planned  at 
the  outset  of  the  business,  will  inevitably 
require  modification  and  readjustment  of  the 
proportions  of  its  component  units  when  the 
business  increases  to  a  marked  degree. 

The  same  evil  results  will  also  follow,  if 
this  readjustment  is  not  made.    The  increase 


THE    SECOND   LAW    OF    EFFORT  155 

of  work  will  be  felt  throughout  the  whole 
system  of  Control,  but  not  equally  every- 
where. Those  duties  having  more  direct  con- 
nection with  physical  product  will  probably 
feel  it  first — storekeepers  will  be  overworked, 
order  clerks  will  be  rushed,  shippers  will  be 
under  continuous  pressure.  The  original  bal- 
ance of  duties  will  be  upset,  and  the  smooth 
running  of  the  system  rendered  difficult. 

In  planning  spheres  of  duty  at  the  outset, 
co-ordination  demands  that  every  possible 
duty  should  be  provided  for  somewhere. 
There  must  be  no  "floating"  duties,  to  be  at- 
tended to  as  opportunity  offers.  What  is 
everyone's  business  is  no-one's  business.  In 
other  words  there  must  be  no  "gaps",  no 
duties  not  definitely  allotted.  In  like  man- 
ner we  must  avoid  "overlaps";  no  work 
must  be  done  more  than  once — a  truism  that 
is  not  always  as  obvious  as  it  appears.  When 
all  the  various  spheres  of  duty  are  thus  co- 
ordinated, a  smooth  working  system  should 
result,  but  as  just  pointed  out,  it  will  always 
be  subject  to  disturbance  from  growth  of 
business,  and  require  periodical  readjust- 
ment accordingly.  The  so-called  "self- 
perpetuating  system"  would  be  more  prop- 
erly termed  a  "self-evident  absurdity". 


156     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

From  the  administrative  aspect  of  Control, 
co-ordination  of  Effort  is  seen  to  refer  to 
the  supplementing  of  the  scanty  details  of 
Orders.  It  will  be  remembered  that  division 
of  Effort  as  regards  Control  implied  the  dis- 
section or  analysis  of  orders  and  the  launch- 
ing of  the  dissected  portions  in  the  proper 
channels,  so  that  each  person  concerned  was 
informed  as  to  his  particular  share  of  work 
on  each  order.  In  practice,  however,  the 
separate  efforts  thus  set  in  motion  need  some 
measure  of  co-ordination  depending  in  large 
degree  on  the  complexity  of  the  work.  In 
some  industries  processes  are  so  simple  that 
consultation  between  the  personnel  of  the 
different  functions  is  unnecessary,  or  at  any 
rate  need  not  be  formally  recognized.  In 
other  industries  it  becomes  important. 

Co-ordination  of  Control  in  regard  to  or- 
ders is  frequently  accomplished  by  arranging 
meetings  of  important  officials  or,  in  other 
words,  by  establishing  conferences  or  com- 
mittees. This  however  is  in  itself  only  a 
practical  application  of  a  general  principle 
that  arises  out  of  the  necessity  to  co-ordinate 
effort  in  routine  work.  This  principle  is  that 
of  Communication. 

Communication  between  the   various   offi- 


THE    SECOND   LAW    OF    EFFORT  157 

cials  of  a  plant  needs  to  be  placed  on  as 
definite  a  basis  as  possible.  Regular  meth- 
ods of  maintaining  it  are  desirable.  There 
should,  for  example,  be  a  systematic  "mail 
service"  at  frequent  intervals,  by  means  of 
which  papers  and  queries  may  reach  their 
destination  automatically  with  the  minimum 
of  disturbance  to  the  routine.  For  more  ur- 
gent matters  an  interdepartmental  telephone 
service  is  advisable,  though  its  use  should  be 
severely  restricted  to  such  matters  as  cannot 
be  conveniently  dealt  with  in  the  regular  mail 
service. 

These  facilities  are  for  the  most  part  con- 
fined to  intercommunication  between  two  in- 
dividuals, though  of  late  telephone  services 
have  been  introduced  allowing  of  several 
persons  joining  in  a  discussion.  Where  more 
than  two  opinions  have  to  be  taken,  however, 
personal  assembly  is  advisable — hence  the 
conference  or  committee  system.  It  is  a  sys- 
tem that  must  be  carefully  guarded  from 
abuse. 

The  chief  danger  of  the  committee  sys- 
tem lies  in  its  taking  away  important  officials 
from  their  regular  duties.  More  than  this, 
such  committees  are  very  apt  to  waste  time 
over  the  discussion  of  trifles  that  should  be 


158      SCIENCE   AND    PKACTICE    OF    MANAGEMENT 

well  within  the  decision  of  some  single  per- 
son. The  writer  has  known  of  a  committee, 
made  up  of  the  heads  of  a  very  large  plant, 
gravely  debating  for  twenty  minutes  what 
kinds  and  quantities  of  steel  pens  should  be 
purchased  during  the  next  quarter.  The 
combined  salaries  of  those  taking  part  in  the 
discussion  would  have  sufficed  to  purchase 
all  the  pens  required,  and  still  have  left  five 
minutes  over  to  discuss  other  matters.  Com- 
mittees are  only  valuable  when  they  are 
wisely  presided  over,  and  when  the  scope  of 
their  discussions  is  closely  denned. 

Co-ordination  of  Effort  in  Comparison. — 
Co-ordination  lies  at  the  very  root  of  effi- 
ciency in  the  function  of  comparison.  The 
Unit  divisions  of  Comparison  are,  as  we  have 
seen,  Transactions.  About  each  transaction 
there  are  commonly  two  or  more  facts  to  be 
recorded.  Co-ordination  demands  that  all 
these  facts  and  these  transactions  taken  to- 
gether shall  actually  cover  the  whole  ground 
without  "gap  or  overlap ".  In  practice  this 
is  sometimes  a  matter  of  some  difficulty  to 
ensure. 

In  some  industries  the  transactions  to  be 
recorded  are  simple,  and  their  co-ordination 
presents  no  serious  difficulties.  The  periodical 


THE   SECOND   LAW    OF    EFFORT  159 

charging  of  a  cupola  or  a  vat  with  the  same 
materials  in  the  same  proportions,  day  after 
day,  is  an  example  of  a  simple  transaction. 
The  work  of  a  storekeeper  or  of  an  inspector 
is  more  complex,  and  just  what  constitutes 
the  whole  record  about  each  of  their  transac- 
tions requires  considerable  reflection. 

The  condition  that  there  must  be  no  gap 
in  the  records  requires  frequently  that  more 
information  should  be  recorded  than  there 
appears  any  present  use  for.  The  elimina- 
tion of  such  information  should  be  under- 
taken with  caution,  for  nothing  is  more  ex- 
pensive or  more  subversive  of  routine  effi- 
ciency than  a  call  from  the  executive  for  in- 
formation on  points  about  which  the  record 
is  imperfect  or  not  exhaustive.  In  large 
plants  where  tabulating  machines  are  used 
for  statistics,  it  is  far  better  to  record  all 
possible  facts  about  each  transaction,  even 
though  there  is  no  immediate  use  for  some 
of  them,  because  having  once  placed  them  on 
the  cards,  their  subsequent  tabulation,  even 
after  the  interval  of  months,  is  a  compara- 
tively easy  task. 

The  condition  that  there  must  be  no  over- 
lap is  more  easy  to  comply  with,  though  it 
is  very  frequently  not  complied  with.     In  a 


160      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

properly  co-ordinated  system  of  Comparison, 
unit  facts  should  be  recorded  only  once,  and 
in  one  place.  The  only  further  work  to  be 
done  on  such  units  should  be  their  inclusion 
in  larger  groups.  We  ought  not  to  have  inde- 
pendent records  made  about  the  same  facts, 
even  though  they  may  be  wanted  for  wholly 
different  purposes.  Co-ordination  means  fit- 
ting together  without  gap  and  overlap,  con- 
sequently there  can  only  be  one  proper  place 
for  each  fact  in  a  complete  system  of  Com- 
parison. The  avoidance  of  copying  and  re- 
copying  of  facts  is  therefore  indicated. 

A  further  and  most  important  aspect  of 
co-ordination  in  regard  to  Comparison,  is  in 
the  building  up  of  the  unit  transactions  into 
a  coherent  and  significant  whole.  When  we 
ask  whether  our  units  of  Comparison  have 
been  thoroughly  co-ordinated,  we  mean  to 
ask  whether  the  resulting  co-ordination  pos- 
sesses significance.  For  just  as  the  division 
of  effort  in  Comparison  runs  parallel  with  its 
division  in  actual  work,  in  designing,  in  run- 
ning equipment,  in  storekeeping,  in  shipping 
and  in  operation,  so  must  the  final  picture 
which  Comparison  paints  be  a  recognizable 
likeness  to  the  result  of  all  these  different 
divisions  of  effort.     The  first  thing  that  we 


THE    SECOND   LAW    OF    EFFOET  161 

wish  to  know  is  what  lias  been  accomplished. 
Now  this  is  obviously  a  synthesis,  because 
our  product  is  itself  a  synthesis.  After  this 
we  may  require  to  know  how  it  has  been  ac- 
complished, which  is  a  matter  of  consulting 
detail. 

Co-ordination,  then,  as  applied  to  the  func- 
tion of  Comparison  calls  for  accurate  de- 
limitation of  the  sphere  of  each  transaction, 
so  that  nothing  is  left  out  and  nothing  is  re- 
corded twice;  and  it  demands  further  that 
these  unit  facts  shall  be  so  marshalled  and 
arranged  that  their  grouping  corresponds  to 
the  natural  synthesis  of  actual  operations  in 
a  significant  way. 

Co-ordination  of  Effort  in  Operation. — 
Gap  and  overlap  in  Operation  are  not  very 
frequent,  for  the  obvious  reason  that  if  they 
existed  in  serious  degree  they  would  bring 
production  to  a  stop.  It  may  therefore  usu- 
ally be  assumed  that  the  successive  processes 
of  Operation  have  each  their  definite  part 
to  play,  and  that  the  sum  of  these  parts  is 
neither  more  nor  less  than  a  complete  whole. 
In  a  few  cases,  and  in  some  industries,  im- 
perfections of  machinery  make  it  necessary 
to  supplement  machine  finish  by  hand  finish, 
but  such  instances  are  hardly  to  be  regarded 


162      SCIENCE   AND   PRACTICE   OF    MANAGEMENT 

as  true  cases  of  "gap"  in  operation.  As  long 
as  they  are  unavoidable  they  form  part  of 
the  true  chain  of  Operation. 

In  machine  shop  work,  however,  a  prob- 
lem occurs  which  has  some  likeness  to  over- 
lap, though  again,  not  strictly  so.  Machines 
of  different  kind,  such  for  example  as 
planers  and  milling  machines,  are  capable 
of  doing  similar  work,  and  in  some  cases 
there  is  but  little  real  preference  to  be  given 
to  either.  Where  Design  is  so  expanded  as 
to  include  the  specification  of  processes,  the 
choice  will  be  made  by  the  department  of 
Design.  But  in  any  plant  some  kind  of  rule 
should  be  worked  out  as  far  as  possible,  so 
that  specific  kinds  of  work  shall  be  confined 
to  one  or  other  of  the  types  of  machine.  Do- 
ing the  same  thing  in  the  same  way  is  an  ex- 
cellent working  rule  until,  of  course,  a  better 
way  is  obvious. 

In  one  respect,  Operation  is  subject  to  the 
law  of  gap  and  overlap,  namely  in  regard  to 
the  "balance"  of  the  machines  and  appli- 
ances it  employs.  How  many  of  this  and 
of  that  machine  are  required  to  handle  the 
given  volume  of  work  is  a  very  nice  question, 
not  always  satisfactorily  answered.  But  as 
this  is  a  matter  of  Equipment,  and  not  of 


THE  SECOND  LAW  OF  EFFORT         163 

routine  operation,  its  consideration  belongs 
to  the  section  of  "Co-ordination  of  Effort 
in  Equipment"  and  has  already  been  re- 
ferred to. 

Usually  in  modern  industry,  the  employ- 
ment of  machinery  so  dominates  the  opera- 
tive function  that  the  question  of  "balance" 
as  regards  the  operatives  themselves  need 
not  be  considered.  It  will  be  obvious  of 
course  that  a  certain  proportion  must  be 
maintained  between  the  different  kinds  of 
skill  involved  in  the  chain  of  Operation.  But 
as  labor  is  a  very  liquid  element,  compared 
with  machinery,  very  little  precaution  is  nec- 
essary in  this  respect.  As  long  as  any  par- 
ticular kind  of  labor  is  employed,  it  is  ob- 
viously necessary,  and  when  overlap  occurs — 
i.  e.,  when  more  men  of  a  particular  skill  are 
present  than  are  required — the  surplus  is 
dropped  until  the  overlap  disappears.  Gap 
and  overlap  as  regards  labor  may  therefore 
be  disregarded  in  practice,  as  elements  to  be 
guarded  against. 


164:      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

TABLE     X.       APPLICATION     OF     THE     SECOND     LAW     OF 
EFFORT     (CONTINUED). 

"Effort  Must  Be  Economically  Regulated" 

(2)     Co-ordination  of  Effort 

Application  of  the  principle  that  "Effort  must  be 
Co-ordinated75  points  out  the  dangers  of  gaps  and 
overlaps,  arising  out  of  the  original  necessity  to  di- 
vide Effort.  This  danger  exists  in  regard  to  all  the 
organic  functions. 

THE    SYNTHETICAL   VIEWPOINT. 

In  Design :—  Design  of  the  divided  units  of 
Product  must  have  reference  to  their  subsequent 
meeting  together.  In  mechanical  work  this  means 
careful  attention  to  the  specification  of  limits,  fits 
and  tolerances.  In  any  class  of  work,  where  com- 
ponents have  to  be  made  separately  and  later  brought 
together,  it  implies  prevision  of  this  necessity  by  the 
designer  to  secure  that  there  is  neither  "gap  or 
overlap"  in  the  pieces ;  i.  e.j  that  they  are  neither  two 
large  nor  too  small  to  fit  properly. 

In  Equipment: — In  Installation  of  Equipment, 
co-ordination  means  that  Equipment  must  be  so 
planned  that  its  capacity  is  balanced ;  i.  e.,  each  kind 
of  Equipment,  both  operative  and  non-operative, 
must  be  present  in  the  right  quantity  to  perform  the 
fullest  service  required  of  it. 

Administratively  it  means  that  the  various  ser- 
vices must  be  sufficiently  developed  to  answer  all 
demands.  Eepairs  must  not  be  neglected,  nor  clean- 
ing overlooked.  Each  kind  of  service  must  be  given 
in  the  right  quantity — neither  starved  nor  over-or- 
ganized. 


THE  SECOND  LAW  OF  EFFORT         165 

In  Control: — Installation.  In  allotting  spheres  of 
duty  there  must  be  no  gaps,  i.  e.,  no  item  of  routine 
must  be  left  out  of  consideration,  so  that  there  is 
doubt  as  to  who  should  attend  to  it.  Further  there 
should  be  no  overlap  of  jurisdiction  (one  man  can- 
not serve  two  masters). 

Administratively,  Co-ordination  implies  supple- 
menting the  scanty  instructions  conveyed  by  orders, 
by  means  of  conferences  and  committees,  which  dis- 
cuss the  run  of  the  work  from  several  viewpoints 
periodically.  Also  as  men  are  not  all  within  speaking 
distance  of  each  other,  it  implies  the  organization  of 
means  of  communication  throughout  the  plant. 

In  Comparison :—  Co-ordination  of  Effort  in  Com- 
parison means  the  bringing  together  of  unit  facts  in 
a  significant  way.  There  must  be  no  overlaps ;  i.  e., 
the  same  fact  must  not  be  recorded  more  than  once. 
Nor  should  any  record  ever  be  copied.  Once  re- 
corded the  only  use  of  the  fact  should  be  its  absorp- 
tion in  a  larger  grouping.  There  must  be  no  gaps. 
Every  fact  likely  to  be  wanted  should  be  recorded, 
even  though  no  very  detailed  analysis  of  them  is  im- 
mediately required. 

In  Operation :—  Operations  having  similar  effects 
(for  example,  planing  and  milling)  should  be  de- 
limited as  far  as  possible,  having  regard  to  the  na- 
ture of  the  product.  A  customary  use  for  each 
should  thus  be  set  up  and  these  overlaps  neutralized. 
Gap  and  overlap  in  Operation  is  not  very  usual,  ex- 
cept in  such  cases  as  this.  In  some  few  cases  imper- 
fection of  process  work  makes  hand  work  necessary 
between  processes.  Gaps  in  Operation  would  be  so 
serious,  usually,  that,  the  chain  of  production  could 
not  go  on. 


Chaptek  VIII 

PEACTICAL  APPLICATION  OF  THE  SECOND 
LAW  OF  EFFOET  (Continued) 

I"  N  the  former  chapter  we  dealt  with  the 
A  first  two  sub-principles  of  the  second 
law  of  Effort  (that  Effort  must  be  Economi- 
cally Eegulated)  the  first  sub-principle  being 
concerned  with  the  division  of  Effort,  and 
the  second  with  its  co-ordination.  In  the 
present  chapter  the  two  remaining  sub- 
principles  of  this  law  will  be  examined, 
namely  that  Effort  must  be  Conserved,  and 
that  it  must  be  Eemunerated. 

(3)     "Effort  Must  Be  Conserved" 

Conservation  is  the  quantitative  principle. 
Its  sphere  is  that  of  pointing  out  in  regard 
to  each  organic  function  that  there  is  a  par- 
ticular kind  of  wastefulness  of  effort  that 
must  be  avoided,  and  conversely  that  there 
is  a  special  kind  of  efficiency  of  effort  to  be 
attained.  Division  of  Effort,  as  we  have  seen, 
regulates  the  primary  directions  in  which 
Effort  is  exercised;  co-ordination  demands 

166 


THE  SECOND  LAW  OF  EFFOET        167 

that  all  these  primary  divisions  taken  to- 
gether form  a  complete  whole  without  gap 
or  overlap;  conservation  insists  that  the 
minimum  amount  of  effort  shall  be  employed 
compatible  with  attainment  of  the  desired 
end.  It  is  the  principle  of  the  "  shortest 
path". 

Conservation  of  Effort  in  Design. — In 
considering  the  unit  part  of  component  of 
product  the  design  of  which  has  been  orig- 
inated by  applying  the  principle  of  division 
of  effort,  and  has  been  examined  in  the  light 
of  co-ordination  of  effort  to  ensure  that  the 
unit  when  made  will  fit  into  adjacent  units 
without  gap  or  overlap,  we  have  now  before 
us  the  problem  of  ascertaining  how  far  we 
can  foresee  methods  of  cutting  down  effort 
in  the  processes  of  Operation. 

If  we  have  a  hundred  pieces  to  make,  all 
alike,  representing  a  definite  unit  of  product 
with  carefully  specified  limits  or  "margins", 
it  is  possible  that  a  variety  of  methods  of 
making  them  are  open  to  us.  At  least  this 
is  so  in  many  industries,  although  in  others 
no  such  option  exists.  If  we  consider  me- 
chanical production,  however,  there  will  be 
at  least  two  alternatives — the  pieces  can  be 
made  by  hand  skill,  or  they  can  be  made 


168      SCIENCE    AND    PRACTICE    OF    MANAGEMENT 

wholly  or  partly  by  machines.  As  there  are 
a  hundred  to  make,  the  first  of  these  alterna- 
tives need  not  be  considered. 

The  principle  that  Effort  nmst  be  con- 
served leads  ns  to  picture  to  ourselves  (1) 
exactly  what  operative  process  will  be  re- 
quired to  give  the  shape  and  dimensions  of 
one  piece;  (2)  how  much  skilled  effort  is 
involved  in  this  operative  process;  (3)  how 
the  fact  that  this  skilled  effort  is  to  be  ap- 
plied one  hundred  times  can  be  altered  into 
a  single  application  of  high-grade  skill,  fol- 
lowed by  ninety-nine  applications  of  low- 
grade  skill.  This  is  usually  accomplished  by 
use  of  jigs,  templates  or  fixtures. 

By  the  adoption  of  a  jig,  we  may  or  may 
not  have  diminished  the  total  value  of  effort 
required  to  make  the  hundred  pieces.  We 
have  not  necessarily  diminished  this  total, 
therefore  the  use  of  a  jig  is  not  a  matter  of 
course;  in  many  cases  it  is  an  economically 
unsound  proposition.  What  we  have  to  do 
is  to  conserve  effort,  but  the  only  way  we  can 
measure  effort  in  the  economic  sense  is  by 
money  value.  Before  we  can  decide  that  the 
use  of  a  jig  will  really  conserve  effort  we 
must  make  a  somewhat  careful  calculation. 
If  such  calculations  are  not  usually  made, 


THE    SECOND   LAW    OF    EFFORT  169 

that  is  because  the  data  are  not  commonly  at 
hand  as  they  should  be. 

We  have  on  one  side  the  cost  of  making 
a  jig,  plus  the  cost  of  using  it  one  hundred 
times.  On  the  other  we  have  the  cost  of  ap- 
plying the  process,  without  the  jig,  also  one 
hundred  times.  But  this  is  by  no  means  all. 
Other  elements  enter  into  the  problem,  which 
have  an  important  bearing  on  its  economic 
solution.  Operation  costs  money  quite  apart 
from  the  labor  concerned.  Even  a  wholly 
automatic  machine  has  a  natural  hourly  rate 
just  as  a  worker  has  a  naturally  hourly  wage. 
A  more  complete  consideration  of  the  prob- 
lem is  the  following : — 

1.     Cost  of  100  pieces  with  jig: 
Materials  of  jig 
Labor  on  making  jig 

*  Machine  time,  ditto 

*  Supplementary  rate  (expense) 

Total  Cost  of  making  jig  

Labor  on  100  pieces,  using  jig 

*  Machine  time,  ditto 

*  Supplementary  rate  (expense) 

Cost  of  100  pieces  

Total  Cost  of  100  Pieces  and  Jig 

*  It  may  seem  that  as  we  cannot  speak  of  a  machine 
as  making  an  effort,  the  inclusion  of  these  items  is  in- 
troducing some  other  element  intp  the  calculation.     This 


170      SCIENCE   AND    PKACTICE    OF    MANAGEMENT 

2.     Cost  of  100  pieces  without  jig: 

Labor  on  100  pieces  

*  Machine  time,  ditto  

*  Supplementary  rate    (expense)  

Total  Cost  of  100  Pieces,  No  Jig 

It  is  only  when  the  first  total  is  less  than 
the  second  that  the  nse  of  the  jig  is  economi- 
cally sonnd.  This  of  conrse  implies  that  the 
jig  will  not  be  required  again.  If  more  than 
100  pieces  are  required,  say  100  now  and 
further  lots  of  100,  then  the  probable  num- 
ber to  be  made  during  the  whole  life  of  the 
jig  should  be  substituted  for  100  in  the  first 
calculation.  A  scrutiny  of  this  kind  applied 
at  least  to  all  cases  where  jigs  are  of  a  costly 
nature  would  often  prevent  the  locking  up 
of  money  unreproductively.  Few  less  satis- 
factory investments  can  be  found  than  an  as- 
semblage of  expensive  masses  of  iron  and 
brass,  of  which  the  future  use  is  very  uncer- 
tain. 

The  use  of  jigs  has  been  considered  some- 
what more  fully  than  space  warrants  because 
it  demonstrates  the  viewpoint  set  up  by  the 
principle  of  conservation  of  effort.  Conser- 
vation is   the   economic  principle   which  is 

is  not  so.  Machine  rents  and  supplementary  rates  are 
merely  the  cost  of  indirect  effort  of  various  kinds;  each 
factor  in  them  represents  the  cost  of  some  service  to 
operation.    See  the  author's  " Production  Factors/'  1910. 


THE    SECOND   LAW    OF    EFFORT  171 

needed  to  supplement  the  principles  of  divi- 
sion and  co-ordination  before  Effort  can  be 
said  to  be  properly  regulated.  It  is  the  chief 
merit  of  the  "scientific  management"  and 
"efficiency"  movements  that  they  have 
brought  this  important  principle  into  relief, 
the  sphere  of  these  movements  being  almost 
wholly  directed  towards  promoting  conserva- 
tion of  effort,  more  especially  in  this  very 
department  or  function  of  design.  But  be- 
cause of  the  lack  of  a  precise  analysis  of  the 
functions  of  management,  and  the  laws  of 
Effort,  a  great  deal  of  confusion  has  arisen 
as  to  what  the  true  sphere  of  these  modern 
movements  really  is.  It  is  generally  sup- 
posed that  their  tendency  is  directly  to 
increase  the  efficiency  of  Operation,  but  this 
is  a  mistake.  No  system  of  management  can 
increase  technical  efficiency. 

The  confusion  has  been  made  greater  by 
the  accidental  circumstance  of  Mr.  Taylor's 
association  with  an  important  series  of  re- 
searches on  the  speed  of  cutting  metals — a 
true  type  of  technical  research — but  these  re- 
searches have  no  more  to  do  with  Manage- 
ment than  they  have  to  do  with  Finance. 
They  have  obviously  only  to  do  with  the 
technics  of  machine-shop  operation  and  have 


no  relation  whatever  to  other  industries,  or 
to  Management  as  a  science. 

"What  these  new  movements  may  properly 
be  considered  to  say  is  this: — "In  many  in- 
dustries there  is  great  wastefulness  of  effort, 
and  it  is  our  endeavor  to  point  out  ways  of 
reducing  such  waste.  "We  do  this,  for  the 
most  part,  by  carefully  considering  and  an- 
alyzing the  way  in  which  the  available  proc- 
esses of  Operation  should  be  applied  to  the 
units  of  Product,  so  that  all  effort  not  di- 
rectly tending  to  produce  by  the  shortest 
path  is  eliminated.  We  find  out  this  shortest 
path  first,  and  then  we  proceed  to  specify  it 
in  great  detail  to  the  men  concerned." 

In  some  cases  this  work  of  eliminating 
wasted  effort  has  been  accompanied  with  a 
study  of  machines,  that  is  with  a  real  tech- 
nical study  of  Operation.*  But  this  has  been 
successful  only  in  those  industries  where 
machines  are  more  or  less  "universal" — 
i.  e.,  can  handle  a  wide  range  of  work — such 
as  machine  tools.  In  many  industries,  how- 
ever, there  is  absolutely  no  room  for  such 

*For  example,  Mr.  Carl  Barth's  "Slide  Eules",  in- 
tended to  facilitate  the  ' '  preparation ' '  of  machine  tools 
for  particular  kinds  of  work.  These  are  purely  technical 
aids  to  a  specific  industry.  They  are  inapplicable  to  other 
industries,  such  as  shoemaking,  chemical  plants,  foundry 
work  and  so  forth. 


THE    SECOND   LAW    OF    EFFORT  173 

studies  since  the  speed  of  operation  is 
strictly  conditioned  by  unchangeable  techni- 
cal considerations.  But  in  such  industries 
there  is  still  a  large  field  for  conserving  ef- 
fort in  all  the  other  functions. 

When,  therefore,  any  of  these  modern 
movements  set  out  to  eliminate  Effort,  and 
point  out  the  shortest  path  for  Production, 
they  are  really  only  applying  the  existing 
processes  of  operation  in  the  most  direct 
waif,  and  they  can  only  bring  about  this  de- 
sirable result,  at  present,  by  minutely  speci- 
fying in  advance  exactly  how  such  processes 
are  to  be  applied.  The  proof  of  this  lies  in 
the  fact  that  they  have  not  accomplished,  and 
do  not  seek  to  accomplish,  any  general  and 
improved  methods  of  operation  which  can  be 
absorbed  by  the  operative,  and  thus  become 
the  foundation  of  new  and  better  habit,  and 
new  and  better  tradition.  All  their  energy  is 
expended  on  individual  items  of  product. 
Each  such  item  must  have  its  operation 
schedule  in  great  detail. 

But  the  specification  of  motions  and  times 
for  individual  items  of  product  is  obviously 
as  much  an  act  of  design,  as  the  specification 
of  dimensions  and  limits  is.  In  either  case 
the  instructions  are  confined  to  the  individ- 


174      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

ual  piece ;  in  either  case  they  are  specified  in 
advance  of  the  piece  being  made.  The  con- 
clusion can  hardly  be  avoided  that  conserva- 
tion of  effort  in  design  is  the  principal  field 
of  activity  of  the  modern  movements. 

Does  it  matter  ?  It  matters  to  this  extent. 
It  is  a  distinct  gain  to  be  able  to  set  ont  on 
the  path  of  trying  to  secure  betterment  with 
a  clear  view  of  the  nature  of  the  problem. 
If  we  have  inefficiency  on  one  hand  and  a 
vague  and  indeterminate  doctrine  of  im- 
provement on  the  other,  it  becomes  a  case  of 
hit  or  miss  whether  we  get  any  economic 
benefit  or  not  in  the  long  run.  But  if  we 
can  determine  at  the  outset  that  our  in- 
efficiency is  in  Design,  or  in  Control  or  in 
some  other  definite  organic  function,  then  we 
have  only  to  scrutinize  our  application  of 
the  laws  of  Effort  as  regards  that  function 
to  expose  the  cause  of  inefficiency. 

The  field  of  conservation  of  effort  in  de- 
sign is  a  wide  and  important  one.  We  have 
just  seen  how  it  may  lead  us,  in  some  cases, 
to  the  substitution  of  lower-grade  skill  for 
high-grade  skill  when  a  number  of  identical 
pieces  have  to  be  made.  This  having  been 
done  where  advisable,  the  next  step  is  to 
determine  the  smallest  amount  of  effort  that 


THE    SECOND   LAW    OE    EFFORT  175 

will  serve  for  the  production  of  the  piece. 
Here  we  enter  the  sphere  of  those  methods  of 
analysis  called  "Time  study"  and  "Motion 
study".  The  whole  object  of  either  of  these 
is  to  conserve  effort. 

Though  such  studies  are  sometimes  car- 
ried out  in  the  shops,  they  have  no  neces- 
sary connection  with  the  function  of  Opera- 
tion. In  general  it  may  be  said  that  these 
studies  are  only  properly  carried  out  in  the 
shop :  (1)  when  units  of  product  are  so  large 
that  they  can  only  be  satisfactorily  handled 
in  the  shop;  (2)  where  new  items  of  product 
are  so  infrequent  that  it  would  not  pay  to 
have  a  separate  department  equipped  with 
the  necessary  machinery;  (3)  where,  by  the 
nature  of  the  machinery,  processes  cannot  be 
isolated  for  examination.  In  short,  they 
should  be  carried  out  in  the  shop  when  it  is 
either  inconvenient  or  impossible  to  do  other- 
wise. 

It  is  not  possible  to  enter  on  a  detailed 
account  of  methods  of  time  or  motion  study. 
We  may  note,  however,  that  the  object  of  mo- 
tion study  is  to  discover  the  fewest  and 
shortest  movements  of  the  operator;  and 
the  object  of  time  study  to  reduce  these 
shortest  efforts  to  time,  and  to  record  the 


176      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

time  as  a  basis  for  subsequent  operative  re- 
muneration. In  some  cases  the  question  of 
rest-intervals  enters  into  the  question,  and 
serves  as  a  counter-element  of  a  psychologi- 
cal nature,  militating,  not  against  conserva- 
tion of  Effort  (for  it  is  obviously  one  of  the 
elements  of  this)  but  against  operation  in 
the  shortest  apparent  time. 

Having  ascertained  these  particulars,  they 
are  embodied  in  specific  Instructions  or 
Schedules,  which  are  as  truly  part  of  the 
complete  design  for  any  individual  unit  of 
product  as  the  drawing  is.  In  most  cases, 
time  required  should  be  divided  into  (1) 
Preparation — i.  e.,  all  preliminaries  to  actual 
production  and  all  dismantling  or  clearing 
up  after  production;  (2)  actual  operation 
on  pieces. 

Arising  from  the  principle  of  conservation 
of  Effort,  another  very  important  sub-prin- 
ciple— that  of  Standardization,  or  the  prin- 
ciple of  " fewest  things" — needs  considera- 
tion. 

In  setting  out  to  manufacture  a  machine 
or  mechanism  it  is  obvious  that  a  great  deal 
of  costly  effort  will  be  expended,  and  that 
this  effort  will  be  of  various  kinds.  Our 
problem  is  then  so  to   arrange  the  design 


THE    SECOND   LAW    OF    EFFORT  177 

that  the  resulting  mechanism  is  produced 
with  the  very  least  effort.  Strange  as  it 
may  appear,  there  are  many  plants  in  which 
no  searching,  adequate  examination  of  the 
product  from  this  point  of  view  is  regularly 
made,  particularly  in  those  which  are  pass- 
ing from  the  "making"  to  the  "manufactur- 
ing" stage.  On  the  other  hand,  there  are 
plenty  of  industries  where  such  preliminary 
examination  of  the  product  is,  from  the  na- 
ture of  things,  very  easy  and  obvious,  and 
is  never  omitted.  This  is  particularly  the 
case  where  the  initial  stage  is  in  the  shape 
of  a  model  instead  of  a  design. 

This  preliminary  scrutiny  takes  two  direc- 
tions. First,  as  to  the  simplicity  and  mini- 
mum diversity  of  parts.  Are  all  the  parts 
designed  of  simplest  shape,  having  manufac- 
ture in  view?  Are  all  such  things  as  screws, 
bolts,  handles,  levers,  and  similar  acces- 
sories called  for  in  the  fewest  sizes  possible 
compatible  with  efficiency?  Further,  when 
several  sizes  or  types  of  the  product  are  to 
be  manufactured  simultaneously,  we  apply 
this  scrutiny  to  the  whole  range  of  sizes. 
Have  we  worked  out  the  designs  with  the 
fewest  number  of  different  sizes  of  parts,  or 
components?     This  latter  form  of  scrutiny 


178      SCIENCE   AND   PEACTICE    OF    MANAGEMENT 

is  generally  called  ''standardizing"  the 
product,  but  the  inquiry  shonld  go  deeper 
than  mere  standardization;  it  should  ask 
whether  ultimate  simplicity  has  been  attained 
and  the  least  effort  wasted. 

A  writer  once  said,  speaking  of  the  trim- 
ness  of  German  cities,  that  whenever  a  Ger- 
man laid  a  brick  he  looked  round  to  consider 
its  effect  on  the  passerby.  Similarly  every 
draftsman  who  designs  a  component  should 
have  his  eye  on  the  way  in  which  that  com- 
ponent is  to  be  made,  with  the  means  at  his 
disposal  in  the  plant  he  is  working  for. 

Some  of  the  means  of  securing  this  are  al- 
most childishly  obvious,  yet  by  no  means  uni- 
versally adopted.  Even  in  so  simple  a  mat- 
ter as  specifying  standard  sizes  of  nuts  and 
bolts  in  every  case,  instead  of  fancy  sizes, 
many  drafting  rooms  have  no  fixed  rules. 
When  it  comes  to  utilizing  standard  parts 
already  in  use,  boring  a  few  standard  sizes 
of  holes  instead  of  an  infinite  variety,  keep- 
ing to  stock  patterns  and  sizes  of  accessories 
such  as  handles,  levers,  hand  wheels,  studs, 
etc.,  few  plants  consider  the  importance  of 
such  apparently  petty  savings. 

Yet  their  influence  in  the  shops  is  often 
something   like    the    widening    circles    of    a 


THE    SECOND   LAW    OF   EFFORT  179 

stone  dropped  into  a  pond.  Multiplication  of 
patterns,  of  castings,  and  especially  of  shop 
tools  such  as  reamers,  wrenches,  drills  and 
taps,  unnecessary  worry  over  ordering,  issu- 
ing and  storage,  and  whole  waves  of  avoid- 
able complication,  are  the  result  of  not  keep- 
ing the  second  division  of  Design  in  view  all 
the  time.  There  is  nothing  more  expensive 
than  a  lack  of  clear  thinking  at  the  beginning 
of  any  series  of  operations. 

Design  is  the  most  powerful  influence  for 
orderly  progress,  or  for  confused  and  aim- 
less activity,  according  as  its  possibilities 
are  utilized  to  the  full  or  not.  It  must  be 
understood,  however,  that  it  is  not  the  capa- 
bilities of  the  designer  so  much  as  the  tra- 
ditions and  practice  of  the  plant  that  will  de- 
termine the  result.  Where  the  principle  of 
conservation  of  effort  is  fully  understood,  the 
natural  tendency  will  be  to  proceed  from  the 
simple  to  the  complex,  and  to  the  latter  only 
so  far  as  it  is  unavoidable.  No  one  will 
then  set  himself  to  make  drawings  for  a  hand 
wheel,  or  a  taper  pin,  until  he  has  ascer- 
tained that  no  stock  article  will  possibly  do 
for  the  purpose. 

Keeping  down  the  number  and  variety  of 
parts   and  of  operations  has  an  important 


180      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

bearing  on  cost  of  production.  The  more 
common  parts  there  are,  the  larger  numbers 
can  be  made  at  one  time,  the  more  familiar 
will  everyone  be  with  their  manufacture,  the 
more  readily  can  they  be  fitted  into  a  regular 
stream  of  production,  and  the  steadier  the 
stream  of  production  the  higher  efficiency  at- 
tainable in  all  departments. 

Standardization,  therefore,  is  a  rather  long 
name  for  a  very  simple  idea.  It  may  be  con- 
veniently summarized  by  describing  it  as  the 
principle  of  "fewest  things''.  These  things 
are  not  merely  the  parts  or  units  of  the 
product,  but  also  include  all  the  accessories 
of  a  minor  nature  which  are  commonly  pur- 
chased rather  than  made,  and  all  the  tools  by 
which  shop  operation  is  carried  out.  To  in- 
troduce an  odd  size  of  hole  into  a  design 
means  setting  up  a  whole  series  of  avoidable 
efforts,  wasting  time  of  a  number  of  officials, 
causing  running  to  and  fro,  and  increasing 
the  chances  of  error.  It  is  a  serious  offence 
against  the  laws  of  effort. 

A  further  application  of  the  principle  of 
conservation  in  design  applies  in  some  indus- 
tries in  regard  to  the  specification  of  "fin- 
ishes". Unlike  "limits  and  fits",  finishes 
have  no  relation  to  co-ordination;    they  im- 


THE    SECOND   LAW    OF    EFFORT  181 

ply  no  question  of  gap  or  overlap ;  but  on  the 
other  hand  they  are  often  wasteful  of  effort. 
To  spend  time  on  careful  surface  finish 
where  there  is  no  economic  call  for  such 
finish  is  simple  waste,  and  therefore,  in  those 
industries  to  which  it  applies,  specification 
of  the  exact  degree  of  finish  to  be  given  is 
a  recognizable  part  of  Design. 

Conservation  of  Effort  in  Equipment. — 
Conservation  of  Effort  in  relation  to  the  ar- 
rangement of  Equipment  might  be  called  the 
principle  of  the  "shortest  path".  The  daily 
transactions  of  a  factory  may  be  regarded 
as  a  perpetual  ebb  and  flow  of  material,  raw 
material  flowing  into  the  shops  and  surging 
up  to  the  machines,  and  finished  product  re- 
turning from  the  shops.  The  importance  of 
confining  this  movement  to  the  shortest  pos- 
sible path  is  sufficiently  obvious.  But  the 
path  traced  by  product  will  be  conditioned 
by  the  way  in  which  Equipment  has  been  in- 
stalled. 

When,  therefore,  the  area  required  by  each 
department  has  been  worked  out,  the  next 
task  is  to  so  arrange  their  relative  positions 
that  the  least  effort  is  called  for  in  effecting 
the  transfer  of  product  between  any  two  such 
areas.    But  this  calls  for  an  important  quali- 


182      SCIENCE   AND    PRACTICE   OF    MANAGEMENT 

fication.  It  does  not  necessarily  imply  that 
the  departments  mnst  be  physically  along- 
side each  other  in  all  cases.  The  governing 
consideration  is  Effort,  not  distance.  Now  it 
may  be  quite  possible  in  many  industries  to 
convey  product,  mechanically,  quite  long  dis- 
tances with  a  trifling  expenditure  of  effort. 
Industries  in  which,  for  example,  it  is  pos- 
sible to  use  band  conveyors,  shoots,  or  other 
automatic  transporting  mechanism,  are  in  a 
different  position  from  those  in  which  the 
product  consists  of  heavy  castings  that  can 
only  be  handled  by  very  expensive  cranes. 

The  lay-out  of  Equipment  is,  therefore,  by 
no  means  always  and  necessarily  along  the 
lines  of  providing  the  shortest  physical  path 
of  travel  for  product.  It  should  be  on  the 
lines  of  providing  travel  along  the  path  of 
least  effort,  and  as  has  just  been  pointed  out, 
this  may  sometimes  and  quite  conveniently 
prove  to  mean  a  path  of  considerable 
physical  travel.  To  convey  product  100  feet 
and  up  two  stories  may  frequently  mean  less 
effort  than  to  transfer  it  by  other  means 
across  the  shop. 

While  this  qualifying  factor  must  be 
pointed  out,  and  indeed  it  is  an  exemplifica- 
tion of  the  value  of  getting  right  down  to  the 


THE   SECOND  LAW   OF   EFFORT  183 

fundamental  principles  of  these  matters, 
rather  than  being  content  with  bald  state- 
ments of  practice,  it  remains  trne  in  many  in- 
stances that  the  path  of  least  effort  and  the 
shortest  physical  path  coincide.  For  prac- 
tical purposes  we  may  therefore  speak  of  the 
"shortest  path.",  meaning  in  general  the 
shortest  physical  path,  and  this  principle  will 
then  apply  to  product,  persons  and  communi- 
cations. 

In  the  installation  of  Equipment,  there- 
fore, conservation  of  effort  means  so  laying 
out  the  plant  that,  after  taking  into  consid- 
eration all  the  possible  shortening  of  phys- 
ical paths  by  means  of  conveying  mechanism 
for  the  product,  elevators  for  the  persons, 
and  automatic  carriers  or  pneumatic  tubes, 
telephones  etc.,  for  the  communications,  the 
amount  of  Effort  used  up  in  effecting  trans- 
port of  all  kinds  will  be  at  a  minimum. 

Equipment  must  not  only  be  installed,  it 
must  also  be  run.  Administratively,  as  we 
have  seen,  this  means  the  dividing  up  of  the 
department  of  Equipment  into  "services", 
such  as  power,  heating,  sanitation,  mainte- 
nance and  repair,  etc.  In  all  these  services 
the  principle  of  conservation  of  effort  ap- 
plies.     Equipment     services    must    be     so 


184      SCIENCE    AND    PRACTICE    OF   MANAGEMENT 

planned  that  they  are  continuous  and  not 
spasmodic.  In  other  words,  forethought 
should  be  exercised  so  that  the  conditions  for 
production,  which  it  is  the  object  of  each 
service  to  maintain,  should  not  be  allowed  to 
run  down.  The  most  important  direction  in 
which  this  applies  is  in  regard  to  mainte- 
nance and  repair.  The  proverb,  ' l  a  stitch  in 
time  saves  nine",  should  be  the  motto  of 
these  services,  repairs  being  effected  where 
possible  before  breakdown  occurs  and  not 
after. 

This  implies  that  Equipment  must  be  sys- 
tematically inspected  according  to  a  regular 
schedule.  Every  item  of  Equipment  should 
be  scrutinized  at  definite  intervals,  and  any 
signs  of  deterioration  noted,  so  that  arrange- 
ments may  be  made  in  advance  to  effect  its 
repair  at  a  time  when  the  least  disturbance 
to  routine  will  be  caused.  When  possible, 
the  inspection  service  and  the  repair  service 
should  be  in  different  hands,  not  only  to  get 
better  control,  but  also  to  ensure  that  the  in- 
spection is  regular  and  continuous. 

Conservation  of  Effort  in  Control. — The 
Installation  of  Control  involves  planning 
spheres  of  duty,  which  as  we  have  seen  must 
be  units   of  simplest  skill  and  must  cover 


THE    SECOND   LAW    OF    EFFORT  185 

the  whole  field  without  gap  or  overlap.  These 
duties  must  also  be  considered  quantita- 
tively; that  is,  the  amount  of  work  involved 
in  the  performance  of  each  duty,  and  the 
amount  of  time  in  which  it  can  be  done  effi- 
ciently must  be  taken  into  account.  It  will 
sometimes  be  found,  too,  that  although  some 
particular  task  has  been  reduced  to  elements 
of  simple  skill  and  these  elements  fit  to- 
gether, the  task  itself  can  be  conveniently 
dispensed  with.  In  plain  language,  when  we 
scrutinize  duties  in  the  light  of  conservation 
of  effort,  we  may  find  that  some  of  them  are 
of  the  nature  of  "red  tape".  To  these  the 
pruning  knife  must  be  applied. 

Each  duty  should  be  an  indispensable  link 
in  the  chain  of  Control.  In  arranging  com- 
mittees, for  example,  it  is  not  sufficient  to 
plan  out  the  sphere  of  such  committees, — 
say,  for  example,  purchases,  or  production. 
Much  more  than  this  is  necessary — they  must 
be  planned  so  that  their  labors  conserve  Ef- 
fort, and  not  waste  it.  Men  must  not  be 
withdrawn  from  routine  duties  at  frequent 
intervals,  to  talk  at  random,  and  to  wrangle 
and  argue.  Committees  should  meet  at  as 
wide  intervals  as  possible,  and  for  a  specific 
purpose,    with    a    specific    programme    or 


186      SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

agenda  on  each  occasion,  to  which  all  inter- 
change of  views  should  be  confined.  Such 
committees  should,  in  fact,  be  regarded  not 
as  a  Board  wielding  executive  powers,  but  as 
a  consultative  gathering  summoned  by  some 
superior  official,  who  invites  their  views  on 
definite  particular  subjects  to  be  arranged 
beforehand.  They  should  be  similar  in  func- 
tion to  a  council  of  war  called  by  a  general 
before  taking  some  important  step  in  a  cam- 
paign; that  is,  to  offer  expert  advice  and 
not  to  make  executive  decisions. 

Conservation  in  Control  demands,  then, 
that  each  effort  should  be  considered  quanti- 
tatively and  in  the  light  of  whether  it  is 
worth  while.  It  serves  to  eliminate  red  tape, 
and  to  make  every  effort  of  every  worker 
contribute  some  absolutely  indispensable 
quota  to  the  general  efficiency  of  Control. 

Conservation  of  Effort  in  Comparison. — 
In  the  organic  function  of  Comparison,  the 
law  of  conservation  of  effort  demands  the 
shortest  path  from  the  unit  facts  to  the  final 
statistics.  Here  again  we  have  to  consider 
whether  every  stage  of  our  process  as 
mapped  out  is  truly  significant  of  some  thing. 
In  each  stage  we  must  ask  ourselves  "Why 
is  this  done?"    And  the  answer  in  all  cases 


THE    SECOND   LAW    OF    EFFORT  187 

should  be  that  it  is  done  because  it  cannot  be 
avoided. 

In  practice,  this  principle  of  Conservation 
is  frequently  and  persistently  ignored.  The 
introduction  of  mechanical  appliances  into 
accounting  has  not  been  an  unmixed  bless- 
ing, because  too  often  the  work  has  been 
fitted  to  the  machine  rather  than  the  machine 
used  as  an  aid  to  indispensable  work.  As 
a  consequence,  large  and  beautiful  sheets  of 
figures,  full  of  detail,  are  prepared,  though 
such  detail  is  rarely  or  never  consulted,  and 
could  be  made  available  by  other  means  if 
really  wanted.  In  a  properly  graded  sys- 
tem of  Comparison,  no  fact  should  be  re- 
corded more  than  once,  and  the  endless  copy- 
ing of  facts  should  be  eliminated  remorse- 
lessly. 

It  must  be  remembered  that  the  sphere  of 
this  function  is  Comparison  and  not  Record. 
There  is  no  use  in  recording  anything  unless 
at  some  future  date  it  will  be  compared  with 
some  other  record.  Every  figure  put  down 
on  paper  without  this  ultimate  object  in  view 
is  simply  wasted,  and  this  principle  alone,  if 
wisely  applied,  will  often  lead  to  the  cutting 
out  of  much  unnecessary  figuring.  To  in- 
clude such  figures  in  statements  is  like  show- 


188      SCIENCE   AXD   PRACTICE   OF   MANAGEMENT 

ing  the  "working"  of  arithmetic  sums,  a 
matter  of  no  practical  importance,  if  the  re- 
sult is  given  correctly.  And  in  accounting 
no  result  should  depend  for  authority  on  its 
correct  "working".  It  should  always  be 
capable  of  absolute  proof  by  other  figures. 

It  is  a  rare  case,  if,  in  a  large  plant, 
scrutiny  does  not  disclose  some  unnecessary 
' l  returns '  \  Often  these  have  been  called  for 
by  someone  in  authority,  who  had  failed  to 
get  the  information  from  the  regular  routine, 
perhaps  because  he  had  not  familiarized  him- 
self with  that  routine.  Then,  possibly,  he 
leaves  or  is  moved  elsewhere,  but  the  com- 
pilation of  the  return  goes  merrily  on — each 
official  that  sees  it  believing  that  some  other 
official  is  using  it.  Conservation  of  effort 
in  Comparison  requires  that  all  facts  should 
be  worked  up,  but  that  they  should  only  be 
worked  up  once  and  the  information  they 
convey  passed  along  the  shortest  path  to 
those  concerned. 

Conservation  of  Effort  in  Operation. — 
Operation  being  the  Function  concerned 
with  the  technical  processes  of  Production, 
and  Production  being  the  grand  aim  of  any 
plant,  it  is  evident  that  conservation  of  ef- 
fort has  a  large  and  important  field  herein. 


THE   SECOND   LAW    OF    EFFORT 


189 


The  sum  of  all  the  unit  processes  of  Opera- 
tion, machines,  processes,  and  skills  gives  a 
"maximum  capacity  to  produce",  and  the 
cost  of  this  maximum  capacity  is  in  itself  the 
sum  of  the  separate  costs  of  all  the  organic 
functions,  including  that  of  Operation  itself. 
This  is  so  important  a  point  that  it  must  be 
shown  in  tabular  form. 


COST      OF     MAXIMUM     PRODUCTIVE      CAPACITY      OF     A 
PLANT. 


Cost     of     the     Organic 
Function  of: — 

Design    

Equipment    

Control    

Comparison   

Operation   


Cost  of  Maximum  Pro- 
ductive  Capacity, 
viz. : — 

Direct  Labor  Cost.  . .  . 

Burden,  as  embodied 
in  Machine  Eents .  . 

Burden,  as  Embodied 
i  n      Supplementary 

Kates 

The  two   sides  of  this  account  must  al- 


K  B 
ways  balance. 

If  now  we  have  a  condition  of  affairs  that 
doesmot  permit  us  to  employ  all  this  produc- 
tive capacity,  it  is  evident  that  a  waste  of 
effort  occurs.  Where  the  "Production  Fac- 
tor"* method  of  factory  accounting  is  in  use, 
the  supplementary  rate  forms  an  index  of  the 

*  See  the  author's  "Production  Factors/'  1910;  also 
"The  Proper  Distribution  of  the  Expense  Burden," 
second   edition,   1913. 


190     SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

extent  to  which  the  maximum  capacity  is  be- 
ing actually  utilized  on  work.  If  machines 
and  production  centers  are  fully  employed, 
nearly  all  the  burden  will  be  absorbed  by 
work  through  the  machine  rents,  and  the 
supplementary  rate  will  be  very  small.  As 
machines  and  other  production  centers  (such 
as  benches,  assembly  floors,  etc.)  become  idle, 
the  amount  of  burden  absorbed  through  ma- 
chine rents  will  decrease  and  that  absorbed 
through  supplementary  rates  will  rise. 

The  first  important  lesson  which  is  im- 
parted by  the  law  of  conservation  of  effort 
as  regards  Operation  is,  therefore,  the  ne- 
cessity of  using  productive  capacity  to  the 
full.  If  all  machines  were  to  be  idle  for  a 
single  day,  all  of  one  day's  capacity  to  pro- 
duce would  be  wasted,  but  it  would  still  have 
to  be  paid  for.  Moreover,  productive  capac- 
ity that  is  wasted  is  irrecoverable ;  it  is  gone 
for  ever.  On  the  other  hand,  if  every  ma- 
chine is  working  on  any  day,  conservation  of 
effort  as  regards  productive  capacity  is  at  its 
maximum,  and  nothing  better  is  possible. 

Twenty-four  hour  operation  of  machines 
would  be  desirable  in  all  industries,  as  it  is 
already  imperative  in  some,  were  it  not  for 
the  fact  that  it  is  less  easy  to  apply  the 


THE    SECOND   LAW    OF    EFFOET  191 

other  laws  of  effort  in  such  cases.  Co-ordina- 
tion of  effort,  in  particular,  becomes  more 
difficult  when  three  eight-hour  shifts  are 
worked.  This  is  quite  apart  from  the  human 
factor  which  does  not  so  readily  lend  itself 
to  unusual  hours  of  work,  or  night  work,  in 
those  industries  in  which  it  is  not  customary. 
In  proportion  as  an  industry  is  complex,  and 
the  product  is  of  a  kind  taking  many  hours 
to  produce  one  piece,  the  difficulties  arising 
from  co-ordination  under  such  circumstances 
tend  to  a  maximum. 

We  have  now  to  consider  another  aspect  of 
the  subject.  While  it  is  obviously  desirable 
that  machines  shall  be  kept  fully  in  opera- 
tion during  working  hours,  it  is  equally  im- 
portant that  each  hour's  work  shall  repre- 
sent maximum  efficiency  of  technical  opera- 
tion. In  some  industries  there  is  but  little 
doubt  about  this,  since  each  machine  can  only 
do  one  thing  at  one  speed  and  in  one  way. 
The  possibility  of  speeding  up,  in  such  cases, 
really  rests  on  new  technical  invention  and 
that  is  wholly  outside  the  science  of  manage- 
ment. But  in  other  cases  machines  are  not 
specific,  but  general  machines;  that  is,  they 
can  perform  different  work  on  different 
kinds   of  material  at  different  speeds  and 


192      SCIENCE   AND    PRACTICE   OF   MANAGEMENT 

in  different  times.  Machine  tools  are  good 
examples  of  this  latter  class.  A  milling  ma- 
chine, for  instance,  will  do  almost  anything 
in  the  way  of  shaping  material  according  to 
the  cutter  used  and  the  way  in  which  the 
tables  and  speeds  are  manipulated. 

Conservation  of  effort  in  Operation  de- 
mands that  whatever  is  required  to  be  done, 
shall  be  done  in  the  most  direct  and  rapid 
way,  conserving  effort  to  the  fullest  extent. 
In  proportion  as  machines  are  "general" 
this  becomes  proportionately  difficult  to  en- 
sure. It  is  because  some  of  the  newer  meth- 
ods of  management  have  gone  hand  in  hand, 
in  certain  cases,  with  improvement  in  the 
technical  operation  of  machine  tools,  that  so 
much  confusion  has  arisen  on  the  subject, 
and  that  minute  scheduling  of  every  step  and 
movement  of  the  operator  has  come  to  be 
considered  as  inseparable  from  progress  in 
production.  But  this  has  only  been  neces- 
sary, or  even  excusable,  first  from  the  gen- 
eral character  of  machine  tools,  and  secondly, 
from  the  almost  complete  ignorance  among 
"practical"  men  as  to  the  working  capacity 
of  each  type  and  size  of  machine  tool. 

In  a  large  variety  of  industries  (viz. — 
nearly  all  those  in  which  the  product  is  dis- 


THE    SECOND   LAW    OF    EFFORT  193 

crete,  and  does  not  consist  of  a  continuous 
band,  as  in  paper-making  and  some  textile 
industries,  or  of  liquids,  as  in  some  processes 
of  soap  making,  brewing,  sugar  refining, 
etc.),  Operation  consists  of  two  parts, 
namely,  preparation  or  setting,  in  which  the 
machine  is  made  ready,  adjusted,  or  pro- 
vided with  special  fittings;  and  Operation 
proper,  in  which  the  Product  is  being  actu- 
ally cut,  pressed,  twisted,  mixed,  sewn, 
heated  or  woven.  Of  these  two  divisions  the 
former  is  pure  waste.  As  long  as  it  is  going 
on,  the  machine  is  being  hindered  from  per- 
forming its  prime  purpose,  viz.,  operation. 
Conservation  demands,  therefore,  that  study 
should  be  given  to  reducing  preparation  or 
setting  time  as  much  as  possible. 

Another  application  of  the  principle  of 
conservation  of  effort  has  reference  to  the 
confining  of  operatives'  duties  to  operation. 
This  applies,  not  only  to  the  rank  and  file, 
but  to  all  concerned  in  operation,  foremen 
and  officials  alike.  Men  engaged  in  technical 
processes  of  production  should  not  be  made 
into  clerks,  messengers  or  laborers.  Any 
such  use  of  them  hinders  production,  though 
apparent  saving  is  made  simply  because  the 
time   thus  wasted  is   charged  to   Operation 


194      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

instead  of  being  charged  to  the  function  it 
really  belongs  to,  such  as  Control  or  Com- 
parison. In  many  shops  this  is  so  far  recog- 
nized that  a  man  can  summon  messengers, 
etc.,  by  pressing  conveniently  arranged  but- 
tons, instead  of  having  to  stop  his  machine, 
and  waste  its  time  and  his  own  in  running 
about. 

TABLE    XI.      APPLICATION    OE    THE    SECOND    LAW    OF 
EFFORT     (  CONTINUED) . 

"Effort  Must  Be  Economically  Regulated" 
(3)     The  Conservation  of  Effort 

Application  of  the  principle  that  "Effort  must  be 
Conserved"  points  out  that  there  is  a  particular  kind 
of  wastefulness  of  effort  in  each  organic  function  that 
must  be  guarded  agaiust. 

Determination  of  the  amount  of  effort  in  the  unit 
of  Product. 

In  Design.  Effort  can  frequently  be  saved  by 
designing  jigs  and  fixtures,  so  that  a  low-grade  skill 
suffices  to  do  very  precise  work.  When  and  where 
this  can  be  done  economically  is  a  matter  of  simple 
calculation  of  cost,  provided  the  minimum  number 
of  pieces  likely  to  be  required  is  known. 

Standardization  also  follows  from  this  principle. 
Varieties  or  sizes  of  parts,  tools,  and  auxiliary  appli- 
ances should  not  be  multiplied  unnecessarily.  This 
is  the  sub-principle  of  fewest  things.  Work  not 
necessary  to  efficiency  should  be  eliminated.  This 
implies  the  specification  in  advance  of  "finishes". 


THE    SECOND   LAW    OF    EFFORT  195 

In  Equipment.  Installation.  Conservation  im- 
plies the  arrangement  of  equipment  in  such  a  way 
that  the  travel  of  product  is  as  continuous  and  direct 
as  possible.  After  each  function  has  been  allotted  a 
definite  area,  Conservation  demands  that  such  areas 
shall  be  arranged  so  that  travel  of  products,  persons, 
and  communications  is  at  a  minimum.  It  involves 
particularly  the  use  of  conveying  and  transporting 
appliances  wherever  possible.  Principle  of  shortest 
path. 

In  Control.  Installation.  Conservation  of  ef- 
fort in  allotment  of  duties  means  that  no  duty  should 
be  set  up  for  which  there  is  not  an  economic  neces- 
sity. This  means  avoidance  of  red  tape  and  system 
as  far  as  possible,     principle  of  fewest  staffs. 

Administration,  use  of  mechanical  appliances. 

In  Comparison.  Conservatism  of  effort  in  Com- 
parison has  to  do  with  the  elimination  of  returns 
that  are  not  directly  significant  and  valuable.  Many 
concerns  are  weak  in  the  accuracy  of  their  unit  facts, 
and  over-organized  in  the  vast  tabular  statements 
they  prepare  from  them.  Conservation  demands  the 
shortest  path  from  the  unit  fact  to  the  final  statis- 
tics. To  settle  what  groupings  of  unit  facts  can  be 
made  to  yield  direct  and  significant  information  re- 
quires expert  experience  of  a  high  order,  in  all  busi- 
ness of  any  size.     Principle  of  least  clerical  work. 

In  Operation.  Too  much  metal  in  jigs.  Keep- 
ing technical  men  on  technical  work,  not  fetching  or 
carrying.  Keeping  machines  at  work.  Avoidance  of 
clerical  work  by  technical  men. 

We  have  now  passed  in  review  all  the  or- 
ganic functions  in  the  light  of  the  principle 
that  Effort  must  be  conserved.    We  have  now 


196      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

to  consider  the  last  sub-section  of  the  sec- 
ond law  of  Effort,  which,  by  declaring  that 
remuneration  is  requisite  for  effort,  leads  us 
to  search  out,  in  regard  to  each  organic  func- 
tion, just  what  types  of  effort  are  most  sig- 
nificant of  efficient  conduct  of  that  function, 
and  therefore  worthy  of  special  reward. 

(4)     Effort  Must  Be  Remunerated 

A  very  brief  description  must  be  given 
of  the  working,  or  it  would  be  more  proper 
to  say,  the  potential  working  of  this  prin- 
ciple, as  regards  most  of  the  functions,  be- 
cause very  little  attempt  has  hitherto  been 
made  to  provide  special  reward  for  so-called 
indirect  workers.  Most  of  the  attention  has 
been  focused  on  the  reward  of  Operation,  al- 
though among  the  many  queer  vagaries  of 
the  school  of  "scientific  management", 
there  was  published  not  long  since  an  ex- 
ample of  a  schedule  of  janitor's  duties 
minutely  specified  and  sub-divided,  with  a 
bonus  for  each  sub-division  worked  out  in 
such  desirable  fragments  as  $.0075,  $.1575 
and  so  forth.  Even  in  face  of  this  it  may 
still  be  said  that  the  reward  of  duties  other 
than  those  of  operation  proper  is  still  un- 
developed. 


THE    SECOND   LAW    OF    EFFORT  197 

Some  part  of  the  responsibility  for  this 
undeveloped  state  of  the  subject  is  no  doubt 
due  to  the  fact  that  indirect  expense  is  usu- 
ally sensed  as  a  vague  and  even  an  alarming 
factor  in  production.  Its  analysis  into  defin- 
ite organic  functions  will,  it  is  hoped,  assist 
to  remove  some  of  the  cloud  of  suspicion 
hanging  over  expense,  by  showing  that  its 
share  in  the  total  result,  viz., — Product,  is 
just  as  definite,  and  its  presence  in  due  pro- 
portion just  as  necessary,  as  is  operative 
labor  itself.  But  on  the  other  hand,  it  is 
just  as  important  and  just  as  necessary  to 
render  it  highly  efficient  by  proper  reward 
as  it  is  to  do  the  same  for  direct  labor.  Per- 
haps even  more  so,  for  while  the  cost  of  the 
function  of  operation  can  be  reduced  in  slack 
times  by  discharging  men,  the  personnel  of 
the  other  functions  can  only  be  reduced  at 
serious  inconvenience  in  many  cases. 

Remuneration  of  Effort  in  Design. — The 
history  of  special  reward  in  the  function  of 
design  is  a  very  short  one.  It  suggests  the 
famous  chapter  "On  Snakes''  in  the  History 
of  Ireland,  which  consisted  of  the  simple 
words  "There  are  no  snakes  in  Ireland." 
Similarly  it  may  be  said  that  no  general  prac- 
tice exists  of  rewarding  Design  on  any  other 


198      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

basis  than  that  of  straight  salary.  The  rea- 
son for  this  is  that  there  is  practically  no 
possible  measure  for  the  designing  act.  As 
has  been  well  said  by  Mr.  Jarnes  Hartness* — 
"The  ordinary  work  of  machine  design,  in 
which  well-known  parts  are  grouped  to  ac- 
complish a  given  end,  without  mnch  thought 
of  attaining  anything  approaching  the  best, 
— such  designing  is  like  painting  a  fence,  so 
many  square  feet  should  be  covered  per  day. 
But  the  real  higher  type  of  work  cannot  be 
measured  in  this  way." 

It  is  probable  that  the  very  nature  of  De- 
sign in  its  higher  branches  will  render  it  as 
incapable  of  measurement  in  the  future  as 
it  has  proved  to  be  in  the  past.  This  is  be- 
cause it  is  purely  creative  work,  like  the 
writing  of  a  poem,  or  the  painting  of  a  pic- 
ture. Considerable  reward  may  follow  on  a 
new  creation,  or  it  may  not,  but  in  any  case 
such  reward  generally  bears  but  little  rela- 
tion to  the  amount  of  time,  energy  and  effort 
expended.  But  while  creative  design  must 
remain  on  a  plane  of  its  own,  it  does  seem 
possible  to  introduce  special  reward  into 
some  of  the  more  routine  activities  of  the 
function  of  Design. 

*  "Human  Factor  in  Works  Management",  p.  92. 


THE   SECOND  LAW   OF   EFFORT  199 

In  each  of  the  organic  functions  we  shall 
try  to  isolate  that  specific  quality  which 
lends  significance  to  the  duties  of  the  func- 
tion. Now  in  Design — that  is,  in  the  prep- 
aration of  working  drawings,  specifications 
and  instructions — there  is  one  such  specific 
quality  very  clearly  indicated,  viz., — accur- 
acy. Errors  in  such  matters  are  about  the 
most  expensive  class  of  mistakes  that  can 
be  made  in  a  plant,  seeing  that  an  error  at 
this  stage  perpetuates  itself  in  a  whole  series 
of  wasted  efforts  on  the  part  of  other  people. 
Further  we  have  the  principle  of  "fewest 
things",  referred  to  in  a  former  chapter,  to 
consider.  Contravention  of  this  principle 
may  be  regarded  as  equivalent  to  an  error 
in  design— the  specification  of  a  dimensional 
relationship  of  an  odd  character,  demanding 
tools  not  already  in  use,  or  of  some  accessory 
of  an  odd  size,  not  already  in  stock,  are  er- 
rors akin  in  their  consequences  to  a  specifica- 
tion of  the  wrong  material  or  the  wrong  size 
of  a  part. 

Special  reward  may,  therefore,  be  based 
on  the  freedom  from  errors  possessed  by 
the  work  of  individual  men.  But  this  must 
not  be  supposed  to  be  an  easy  matter.  It 
will  depend  on  just  how  far  the  general  or- 


200     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

ganization  of  the  drafting  room  and  of  the 
system  of  Control  is  of  a  high  order.  The 
draftsman  can  only  be  held  responsible  if 
every  kind  of  information  necessary  to  him 
is  immediately  available.  In  few  plants  is 
this  the  case  as  yet.  Attempts  that  have  been 
made  to  introduce  bonus  or  special  reward 
into  drafting  rooms  have  not  met  with  en- 
couraging success,  largely  because  success 
depends  on  factors  beyond  the  control  of  the 
man  concerned  in  many  cases. 

Remuneration  of  Effort  in  Equipment. — 
This  applies  wholly,  of  course,  to  the  ad- 
ministrative aspect  of  Equipment,  and  not 
at  all  to  its  installation.  The  latter  is  paid 
for  out  of  capital  in  most  cases,  and  the  only 
efficiency  of  remuneration  possible  in  regard 
to  it  is  keen  buying. 

The  "services"  into  which  the  function  of 
Equipment  is  divided  (power,  heating,  light- 
ing, sanitation,  conveying,  maintenance  and 
repair,  etc.),  are,  as  has  been  pointed  out, 
essentially  concerned  with  the  maintenance 
of  uniform  conditions.  The  uniform  char- 
acter of  these  conditions  is  therefore  their 
specific  feature.  Keeping  up  steam  pressure, 
temperature,  cleanliness,  etc.,  and  elimina- 
tion of  stoppages  by  breakdowns  are  classes 


THE   SECOND   LAW   OF    EFFORT  201 

of  effort  which  would  seem  to  be  possible  of 
special  reward.  To  effect  this,  close  inspec- 
tion and  record  are  necessary,  but  high  effi- 
ciency cannot  be  secured  without  these  in  any 
case.  With  the  clear  delimitation  of  respon- 
sibility called  for  by  the  principle  of  co- 
ordination of  Control,  there  seems  no  reason 
why  the  services  of  Equipment  should  not 
be  standardized  and  made  the  subject  of  spe- 
cial reward.  In  connection  with  such  serv- 
ices, the  "bulletin-board"  system  of  publish- 
ing such  matters,  making  them  an  object  of 
general  interest  to  the  employees  as  a  body, 
could  be  usefully  applied. 

Remuneration  of  Effort  in  Control. — In 
the  higher  departments  of  Control,  in  which 
the  grade  of  capacity  concerned  approaches 
the  professional  status,  it  is  not  likely  that 
specific  reward  will  ever  be  thought  desir- 
able. But  in  the  lower  branches,  where  such 
men  as  storekeepers,  order  clerks,  routing 
men,  etc.,  deal  entirely  with  routine  matters, 
it  would  seem  that  some  description  of  spe- 
cial reward  will  eventually  be  worked  out. 
The  routine  duties  of  Control  have  two  fac- 
tors that  condition  their  efficiency:  (1) 
prompt  handling  and  despatch  of  their  work ; 
(2)  accuracy  in  such  work.     Errors,  misun- 


202     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

derstandings,  delays  and  forgetfulness  are 
the  diseases  of  such  routine  duties,  and  their 
absence  should  therefore  be  promoted. 

The  keeping  down  of  arrears  in  work  to 
an  irreducible  minimum  is  a  matter  not  diffi- 
cult of  ascertainment,  and  the  fixing  of  a 
bonus  dependent  on  the  number  of  days  per 
month  on  which  work  was  entirely  cleared 
up  by  each  man  in  question  does  not  offer 
any  insuperable  difficulty.  As  regards  er- 
rors, these  are  more  difficult  to  assess,  be- 
cause their  consequences  are  not  uniform. 
Some  errors  may  be  condoned  because  their 
results  are  trifling,  but  others  may  have  seri- 
ous consequences,  and  these  are  precisely 
what  must  be  discouraged.  It  is  possible 
that  in  any  given  plant,  the  different  kinds 
of  errors  usually  met  with  may  be  graded 
into  three  or  four  groups,  and  a  definite 
loss  of  bonus  assigned  for  each  grade.  The 
matter  is  one  to  be  approached  with  caution, 
but  there  seems  no  reason  why  special  re- 
ward would  not  work  successfully  in  this 
function  on  these  lines. 

Premiums  or  prizes  may  also  be  offered 
for  suggestions  making  for  improvements  in 
the  system  of  control,  such  as  in  storekeep- 
ing,  handling  and  transporting  product,  etc. 


THE   SECOND  LAW   OF   EFFORT  203 

Remuneration  of  Effort  in  Comparison. 
— Much  the  same  classes  of  specific  quali- 
ties are  to  be  selected  for  special  reward  in 
the  case  of  Comparison.  The  two  essential 
features  of  comparison  and  recording  work 
are  (1)  that  it  should  not  be  in  arrears,  (2) 
that  it  should  be  accurate.  This  applies 
alike  to  the  inspecting  and  to  the  accounting 
divisions  of  the  function.  It  should  not 
therefore  be  difficult  to  work  out  a  method  of 
special  reward  for  the  officials  concerned 
with  comparison  based  on  deductions  of 
bonus  for  arrearage,  and  similar  deductions 
for  errors. 

Special  prizes  may  be  offered  for  improve- 
ments in  blanks  or  forms,  or  for  pointing  out 
defects  in  methods  of  collecting  unit  data  at 
their  source. 

Remuneration  of  Effort  in  Operation. — 
The  field  of  remuneration  as  regards  Opera- 
tion is  such  a  large  one  and  so  much  has 
of  late  been  written  about  it  that  only  the 
briefest  mention  is  necessary  here.  In  the 
appendix  to  this  book,  however,  will  be  found 
an  examination  of  some  of  the  best  known 
systems  of  premium  and  bonus  in  the  light 
of  their  bearing  on  expense  burden,  and 
therefore  on  total  cost. 


204     SCIEXCE   AXD   PRACTICE   OF    MANAGEMENT 

Generally  speaking  the  specific  quality  se- 
lected for  remuneration  in  the  shops  is  that 
of  doing  the  most  work  in  the  least  time. 
This  implies,  of  course,  that  such  work  comes 
up  to  the  standard  of  quality  set  by  inspec- 
tion. All  bonus  systems  therefore  demand 
a  sufficient  development  of  the  function  of 
Comparison,  which  includes  inspection,  and 
also  the  record  of  earnings.  For  the  most 
part  they  also  demand  that  the  function  of 
Design  shall  be  developed  to  the  extent  that 
the  standard  time  and  the  standard  processes 
on  each  part  are  closely  ascertained  and 
specified  in  advance.  In  fact,  to  work  bonus 
systems  satisfactorily,  a  high  degree  of  de- 
velopment in  all  the  other  four  functions, — 
viz.,  Design,  Equipment,  Control  and  Com- 
parison— is  necessary.  In  other  words,  as 
has  been  pointed  out  several  times, .  Conser- 
vation of  Effort  (or  cutting  down  direct 
labor  cost)  is  by  no  means  the  whole  story 
in  modern  management.  To  be  successful  it 
should  be  the  final  stage  in  betterment,  not 
the  first,  because  the  establishment  of  suit- 
able conditions  in  all  the  other  functions  is 
necessary  if  permanence  is  to  be  secured. 

The  Second  Law  of  Effort  is  tabulated  on 
the  following  pages. 


THE  SECOND  LAW  OF  EFFORT         205 

TABLE  XII.   APPLICATION  OF  THE  SECOND  LAW  OF 
EFFORT  (CONTINUED). 

"Effort  Must  Be  Economically  Regulated  " 
(4)     The  Remuneration  of  Effort 

Application  of.  the  principle  that  "Effort  must  be 
remunerated"  discloses  that  there  is,  in  each  or- 
ganic function,  a  special  type  of  efficiency  to  be 
encouraged   and   rewarded. 

In  Design: — Relates  to  the  basis  of  reward  spe- 
cially applicable  to  the  work  of  Design.  Bonus  or 
other  payment  systems  for  routine  work  of  draft- 
ing, tracing,  coloring,  printing,  etc.  Special  premi- 
ums for  exercise  of  inventive  faculty.  Eewards  for 
simplification  of  design  for  manufacture.  Special 
feature — Eeward  for  improvements. 

In  Equipment: — Bonus  systems  based  on  unin- 
terrupted service  of  belts,  motors,  power,  etc.  Ee- 
wards for  detailed  improvements  in  service  or 
economy  in  service.  Special  feature — Eeward  for 
maintenance  of  uninterrupted  favorable  conditions. 

In  Control : —  Bonus  systems  based  on  the  absence 
of  hitch  due  to  errors,  forgetfulness,  misunder- 
standings, storekeeping  errors.  Special  feature — 
Eeward  for  smooth  working,  leading  to  absence  of 
delays  arising  out  of  poor  control. 

In  Comparison :— Bonus  system  based  on  prompt- 
ness and  accuracy — for  keeping  work  up-to-date.  Ee- 
wards for  improvements  in  blanks,  books  and  meth- 
ods, and  for  pointing  out  defects  of  accuracy  in 
method  of  collecting  prime  records,  such  as  opera- 
tives' job  time.  Special  feature — Eewards  for  ac- 
curacy and  promptness — absence  of  errors  and  de- 
lays. 


206      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

In  Operation: — For  doing  the  best  work  in  the 
least  time  (ordinary  remuneration  of  operative  labor 
by  bonus  or  piece  work) .  Rewards  for  improvements 
of  processes,  machines  or  tools,  and  for  reducing 
wastes.  Bonus  for  supervisors,  based  on  high  earn- 
ings of  bonus  by  their  subordinates.  Bonus  for  low- 
ering percentage  of  waste,  spoiled  work,  etc.  Special 
feature — Eeward  for  economical  operation. 


Chapter  IX 

APPLICATION    OF    THE    THIRD    LAW    OF 
EFFORT 

Sub-principles  i,  2,  3,  and  4 

1.  Good  physical  conditions  and  environment   must  be 
maintained. 

2.  The  vocation,  task   or   duty  should  be  analyzed  to 
determine  the  special  human  faculty  concerned. 

3.  Tests  should  be  applied  to  ascertain  in  what  degree 
candidates  possess  special  faculty. 

4.  Habit  should  be  formed  on  standardized  bases,  old 
or  new. 

CO  far  we  have  been  dealing  with  persons 
^  in  their  aspect  as  officials  fulfilling  spe- 
cial duties.  We  have  in  fact  treated  the 
human  factor  in  production  merely  as  an  ab- 
straction— a  passionless,  perfect,  malleable, 
plastic  article  to  be  labelled  "Designer", 
"Operative",  "Storekeeper",  "Clerk",  as 
might  be  found  necessary  for  the  immediate 
purpose  in  view.  In  other  words  we  have 
not  been  considering  men  at  all  but  only  the 
possible  actions  of  Man  at  large.  In  the 
present  chapter  we  shall  get  away  from  this 
bloodless  and  abstract  view,  and  shall  con- 
sider the  human  factors  of  production  in  the 
207 


208      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

light  of  the  third  law  of  Effort,  viz., — that 
"Personal  Effectiveness  must  be  Promoted." 

Every  properly  constituted  young  man  be- 
lieves that  supreme  attainment  in  ahnost  any 
line  of  human  endeavor  is  within  his  grasp. 
His  remaining  years  are  spent,  too  often,  in 
discovering  his  limitations,  and  in  undergo- 
ing the  painful  process  of  disillusionment. 
While  ambition  is  the  most  powerful  lever  of 
success,  disappointed  ambition,  on  the  other 
hand,  is  frequently  a  deadly  blight  on  the  en- 
ergies. As  industry  develops,  particular 
types  of  mind,  habit  and  character  find  cer- 
tain directions  closed  to  them,  and  certain 
other  directions  more  open  to  them  than  to 
others.  A  man  is  not  just  a  man,  he  is  a 
particular  and  specialized  combination  of 
powers,  faculties  and  weaknesses,  and  as 
civilization  becomes  more  complex,  the  im- 
portance of  recognizing  this  becomes  more 
important  both  to  the  individual  and  to  so- 
ciety at  large. 

The  idea  is  expressed  popularly  by  the 
saying  that l '  a  square  peg  must  not  be  placed 
in  a  round  hole".  But  in  modern  industry, 
we  find  an  infinite  series  of  sizes,  both  of 
pegs  and  of  holes.  The  field  of  inquiry  thus 
opened  up   is   as   yet  hardly   cultivated  to 


THE    THIRD   LAW    OF    EFFORT  209 

any  noteworthy  extent,  but  the  problem  has 
at  least  been  recognized  and  stated,  and 
given  the  title  of  "Industrial  Psychology". 
The  pioneer  worker  in  this  new  field  is  Pro- 
fessor Hugo  Muensterberg  of  Harvard, 
whose  work  "Psychology  and  Industrial  Effi- 
ciency "  should  be  in  the  hands  of  every  pro- 
gressive student  of  the  science  of  manufac- 
turing management. 

In  exhibiting  the  scope  of  the  third  law 
of  Effort,  we  cannot  go  very  deeply  into 
these  matters,  or  do  more  than  indicate 
briefly  what  class  of  problems  comes  under 
the  law.  The  whole  subject  is  so  new  that 
only  its  main  outlines  can  be  indicated. 

Methods  of  Promoting  Personal 
Effectiveness  • 

If  we  regard  the  strictly  practical  task  of 
getting  the  best  value  for  a  given  payroll, 
it  becomes  evident  that  a  study  of  human 
beings,  as  such,  will  be  remunerative.  If  we 
have  bad  conditions  and  surroundings,  there 
will  surely  be  a  money  loss  on  that  account, 
since  a  man,  no  less  than  a  cabbage,  requires 
favorable  conditions  for  thriving.  If  we  are 
expending  money  for  mental  or  physical 
services,  it  will  hardly  be  a  paying  proposi- 


210      SCIENCE   AND   PRACTICE    OE    MANAGEMENT 

tion  to  impair  the  possible  maximum  of  such 
services,  either  as  regards  quantity  or  qual- 
ity, by  neglecting  to  maintain  the  most  suit- 
able conditions  within  our  power.  The  first 
sub-principle  of  the  third  law  of  Effort  may 
therefore  be  stated  as  follows : — 

(i)     Good  physical  conditions  and  environment 
must  be  maintained 

Though  a  good  deal  more  attention  is  paid 
to  this  sub-principle  than  was  the  case  twenty 
or  thirty  years  ago,  it  is  probable  that  the 
subject  is  only  half  explored  at  the  present 
time.  We  have  passed  beyond  the  idea  that 
a  workshop  is  necessarily  a  dark,  dirty,  un- 
tidy and  unwholesome  place,  encumbered 
with  the  accumulated  dust,  debris  and  waste 
of  years.  "We  have  come  to  realize  that  it 
is  not  really  good  business  to  have  death- 
traps conveniently  scattered  about  in  the 
shape  of  unguarded  machinery  and  belts.  We 
begin  to  understand  that  a  close  and  fetid  at- 
mosphere is  not  a  necessary  concomitant  of 
either  office  or  shop.  We  have  even  begun 
to  appreciate  that  noise  and  confusion  are 
really  inimical  to  the  proper  functioning  of 
the  human  mind  at  its  best.  But  we  have 
not  learned  the  lesson  very  thoroughly,  or 


THE   THIRD   LAW    OF    EFFORT  211 

carried  its  teachings  into  any  great  degree 
of  refinement,  save  in  a  few  instances.  We 
have  hardly  begun  to  do  as  much  for  sys- 
tematically promoting  favorable  conditions 
for  the  human  factor  in  industry  as  a  scien- 
tific grower  of  crops  under  glass  does  for 
his  grapes,  tomatoes,  or  melons. 

Why  is  this?  The  answer  must  be  that 
the  human  organism  has  a  hardier  vitality 
than  a  vegetable,  that  it  can  exist  and  even 
work  in  a  fashion,  under  conditions  far  re- 
moved from  the  best.  Where  the  growing 
plant  would  perish  and  become  a  total  finan- 
cial loss,  the  human  being  remains  in  evi- 
dence, still  breathing  and  moving,  still  work- 
ing, still  earning  wages.  And  the  short- 
sighted employer  of  the  past,  observing  all 
this,  never  thought  of  asking  whether,  in 
point  of  fact,  the  wrages  earned  under  con- 
ditions of  discomfort  were  producing  as 
much  as  they  would  if  the  worker  were  made 
comfortable.  He  could  always  see  the  cost 
of  providing  good  conditions  —  what  he 
failed  to  see  was  the  net  result,  or  efficiency. 

In  adjusting  physical  conditions  and  sur- 
roundings to  promote  the  best  working  en- 
vironment, the  need  of  a  sense  of  proportion 
is  obvious.     In  the  reaction  from  the  old- 


212      SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

time  conditions,  a  tendency  to  overdo,  with 
the  accompaniment  of  paternalism  and  fussi- 
ness,  will  sometimes  be  manifest.  To  pro- 
vide baths,  it  is  not  necessary  to  construct 
them  of  marble ;  to  enliven  the  atmosphere 
of  the  workshop  we  do  not  need  stained-glass 
windows  of  costly  design;  to  provide  dining 
facilities  we  hardly  require  to  imitate  the 
tone  of  a  Fifth  Avenue  restaurant.  On  the 
contrary,  the  prime  and  fundamental  condi- 
tions which  are  favorable  to  the  free  work- 
ing of  the  human  organism  are  simple  and 
not  costly.  Simplicity  is  not  only  less  ex- 
pensive but  actually  more  efficient  than  over- 
refinement.  What  we  should  strive  for  is  the 
removal  of  bad  conditions  that  are  obviously 
destructive  of  efficiency,  not  the  elaboration 
of  what  we  may  consider  are  specially  favor- 
able conditions,  because  the  result  of  such 
elaboration,  in  the  present  state  of  knowl- 
edge, is  always  uncertain. 

Our  aim  should  be  to  provide  a  generous 
minimum,  rather  than  to  undertake  the  task 
of  endeavoring  to  raise  the  standards  of  the 
persons  concerned  beyond  the  level  at  which 
they  may  happen  to  be.  Though  this  may 
be  undertaken,  in  some  instances,  as  a  hobby 
or  from  some  sense  of  duty,  it  cannot  be  re- 


THE    THIRD   LAW    OF   EFFORT  213 

garded  as  strictly  part  of  the  science  of  in- 
dustrial management.  Much  of  what  is 
known  as  "welfare"  work,  is  therefore  out- 
side the  limits  of  the  third  law  of  Effort, 
though  at  some  future  day  it  may  be  so  well 
explored,  and  its  utility  so  firmly  established, 
as  to  become  a  recognized  sub-principle  of 
that  law.  At  present  it  must  be  regarded 
either  as  philanthropy,  or  at  best  as  an  ex- 
perimental attempt  to  extend  the  limit  of 
application  of  the  law.  In  very  large  fac- 
tories, forming,  as  they  sometimes  do,  quite 
considerable  communities,  perhaps  isolated 
and  self-contained,  the  administration  may 
project  its  energies  into  the  area  of  social 
life,  at  least  to  the  extent  of  leading  and 
guiding  it.  But  such  activity  can  hardly  be 
said,  at  the  present  day,  to  form  an  inalien- 
able part  of  the  management  of  industries, 
if  only  because  it  is,  for  the  most  part,  an 
entirely  optional  responsibility,  and  opinions 
are  divided  as  to  whether  it  ought  to  be  as- 
sumed, or  even  whether  it  can  be  assumed 
with  ultimate  benefit  to  all  parties  concerned. 
Our  line  of  inquiry  must  therefore  be  to- 
wards establishing  certain  well-recognized 
minima  of  hindrances  to  the  free  working  of 
the  human  organism.   We  must  endeavor  to 


214     SCIENCE  AND   PEACTICE   OF   MANAGEMENT 

find  out  what  are  the  normal  conditions  un- 
der which  the  ordinary  man  finds  himself  at 
his  best,  and  then  take  precautions  to  main- 
tain his  surroundings  at  this  minimum  level. 
Naturally,  for  different  kinds  of  occupation, 
quite  different  standards  of  minimum  condi- 
tions will  be  required.  The  weigher  at  the 
cupola  will  not  require  such  a  perfect  equilib- 
rium of  conditions  as  the  president  in  his 
office,  or  as  the  designer  working  on  a  new 
scheme.  But  neither  the  weigher  nor  the 
president  can  work  in  the  dark;  neither  can 
work  efficiently  at  zero  temperature ;  neither 
can  work  twenty-four  hours  a  day;  neither 
can  do  his  work  properly  if  subject  to  con- 
stant interruption  that  distracts  his  atten- 
tion. For  each,  in  his  respective  degree, 
therefore,  there  will  be  a  minimum  of  condi- 
tions below  which  his  efficiency  will  suffer, 
and  the  object  of  the  first  sub-principle  of 
the  third  law  of  Effort  is  to  observe  what 
these  minimum  conditions  are,  and  to  main- 
tain them. 

Most  persons  work  at  their  best  when  they 
are  unaware  of  their  surroundings.  They 
work  less  efficiently  as  their  attention  is  di- 
verted from  the  work  in  hand  by  unpleasant 
sensations.    And  this  holds  true,  even  though 


THE  THIRD  LAW   OF   EFFORT  215 

the  marvelous  faculty  of  " inhibiting' '  atten- 
tion makes  it  possible  to  work  under  very 
bad  conditions  where  these  are  habitual  and 
customary.  For  recent  scientific  opinion 
tends  to  the  belief  that  even  though  we  suc- 
ceed in  inhibiting  attention  to  a  regular 
noise,  for  example,  and  do  not  in  fact  notice 
it,  it  has  a  disturbing  effect  on  the  organism 
all  the  same.  Besides,  the  power  of  inhibi- 
tion varies  in  different  individuals,  and  it 
also  varies  according  to  the  amount  of  con- 
centration necessary  for  the  work  in  hand.  A 
mathematician,  onqe  immersed  in  his  prob- 
lem, is  proverbially  proof  against  earth- 
quakes ;  a  poet  in  the  throes  of  composition 
has  his  nerves  set  on  edge  by  the  crinkling 
of  a  sheet  of  paper.  These  are,  of  course,  ex- 
treme cases,  but  all  intermediate  stages  may 
be  found. 

If,  therefore,  persons  can  accustom  them- 
selves to  work  under  the  most  unfavorable 
conditions,  it  does  not  follow  that  it  is  good 
for  them  or  their  work.  It  may  be  taken  as 
a  thoroughly-proven  principle  that  the  better 
the  conditions  the  better  the  work.  This  is 
particularly  the  case  when  bad  conditions  are 
intermittent.  Starting  to  work,  for  example, 
in  a  cold  shop  at  a  temperature  around  f reez- 


216     SCIENCE   AND    PRACTICE   OF   MANAGEMENT 

ing  point  is  an  example  of  conditions  that 
make  for  much  more  inefficiency  than  is  com- 
monly believed.  Working  in  failing  day 
light  is  another  snch  condition,  as  anyone  can 
try  for  himself,  and  experience  the  relief  felt 
when  a  powerful  light  is  turned  on.  Yet  fre- 
quently absorption  in  work  inhibits  atten- 
tion to  the  insufficiency  of  light,  though  the 
strain  on  the  faculties  has  been  gradually 
augmenting  all  the  time.  It  is  only  when  this 
strain,  and  the  feeling  of  discomfort  to 
which  it  gives  rise,  overpowers  the  inhibition 
and  calls  our  attention  to  the  cause,  that  we 
perceive  how  far  we  have  been  incommoded 
by  the  bad  conditions  that  have  stolen 
upon  us. 

The  whole  subject  of  industrial  psychology 
is  fascinating,  but  it  is  also,  at  present, 
rather  nebulous  and  vague.  To  keep  our  in- 
quiry within  practical  limits,  it  will  be  well 
to  confine  our  attention  to  the  common  ex- 
periences of  factory  life.  Even  when  we  do 
this  the  subject  is  full  of  dangers,  because 
of  the  tendency  to  replace  what  should  be 
fluid  human  relations  by  clumsily  ascer- 
tained standards.  The  moment  we  fix  cer- 
tain standards  of  conduct,  attainment  or 
merit,  we  set  in  motion  a  whole  chain  of  dis- 


THE   THIRD   LAW    OF   EFFORT  217 

simulations.  Men  give  their  attention,  not 
alone  to  doing  well,  but  to  the  appearance 
of  doing  well  according  to  the  arbitrary- 
standards  they  find  set  up  against  them,  and 
they  are  apt  to  develop  a  great  deal  of  in- 
genuity in  doing  this.  Elemental  simplicity 
in  making  arrangements  to  guide  human  na- 
ture is  therefore  essential  to  success. 

We  may  begin  by  a  study  of  physical  ne- 
cessities. Fresh  air,  warmth,  good  light, 
quiet,  movement  free  from  danger  are  condi- 
tions desirable  for  any  kind  of  work.  But 
merely  stating  this  is  not  enough.  All  these 
factors  require  stating  in  more  precise  terms 
for  different  purposes.  Fresh  air  should  not 
imply  drafts.  Warmth  should  mean  definite 
limits  of  the  thermometer.  Light  should  be 
considered  not  only  with  regard  to  quantity, 
but  with  regard  to  the  angle  at  which  it 
strikes  the  work,  to  the  shadows  it  produces, 
and  the  presence  or  absence  of  glare.  Quiet 
is  a  relative  term;  very  different  degrees  of 
quiet  are  essential  for  a  molding  floor  and  an 
accountant's  office.  Freedom  of  movement  is 
also  relative ;  movement  is  safer  in  the  offices 
than  in  the  shops,  from  the  nature  of  things. 
But  no  obvious  danger  should  be  permitted 
to  exist  that  can  be  guarded  against.    Men 


218       SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

will  move  more  quickly  where  they  can  move 
safely,  even  though  familiarity  with  danger 
produces  callousness. 

These  more  obvious  physical  conditions  be- 
ing attended  to,  we  come  next  to  indirect  con- 
ditions. It  is  becoming  appreciated  that  san- 
itary, clean,  and  bright  surroundings  have 
an  influence  on  the  spirits.  Shops  that  are 
clean,  bright  and  orderly  will  not  only  at- 
tract a  better  type  of  man,  but  will  also  exert 
an  unconscious  influence  on  everyone. 
Human  nature  is  so  sensitive  and  ready  to 
adapt  itself  to  its  environment  that  a  careful 
man  working  in  a  dirty  and  disorderly  shop 
will  lose  some  of  his  best  qualities.  Sim- 
ilarly, an  untidy  go-as-you-please  kind  of 
man  coming  into  a  shop  which  is  scrupu- 
lously clean  and  bright,  and  where  nothing 
is  out  of  its  place,  will  unconsciously  feel 
the  influence  that  such  orderliness  exerts, 
and  will  begin  to  improve. 

The  primitive  wants  of  men  should  be  care- 
fully provided  for.  Sanitary  appliances, 
latrines,  washing  facilities,  clothes  lockers, 
should  not  only  be  provided  but  maintained 
in  an  orderly  condition.  They  should  not  be 
placed  in  any  odd  corner,  but  so  distributed 
as  to  avoid  congestion  and  crowding.    Fur- 


THE   THIRD   LAW    OF   EFFORT  219 

ther,  the  supply  of  drinking  water  should  be 
carefully  attended  to.  No  one  should  have 
to  go  far  for  a  drink,  and  the  accommodation 
provided  should  be  such  as  a  self-respecting 
man  cares  to  use.  In  many  cases  this  im- 
portant matter  is  neglected.  It  is  one  of  those 
small  points  that  silently  make  for  efficiency. 

Next  we  come  to  what  may  be  termed  the 
"protective' '  services.  Foremost  amongst 
these  is  the  fire  service.  Every  factory  of 
more  than  one  story,  and  all  buildings  of  one 
story  in  which  there  is  anything  to  burn, 
should  be  provided  with  a  sprinkler  system. 
In  addition  to  this,  fire  drill  should  be  rig- 
orously insisted  on.  Fire  wardens  should  be 
appointed  and  held  responsible  for  seeing 
that  emergency  doors,  stairways  and  gang- 
ways are  never  encumbered,  that  doors  are 
always  unlocked  during  working  hours,  and 
that  alarm  apparatus  is  tested  at  frequent, 
regular  intervals.  The  most  elaborate  pre- 
cautions sometimes  fail,  with  terrible  results, 
for  want  of  efficient  inspection. 

The  fencing  of  all  dangerous  machinery, 
and  of  elevator  shafts  and  similar  openings 
in  floors  is  not  merely  dictated  by  common 
humanity,  but  is  actually  the  cheapest  kind 
of   investment.      Movement    surrounded   by 


220        SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

dangers  will  always  be  slow  and  cautious 
movement,  even  though  it  becomes  an  uncon- 
scious habit  after  a  while.  Unfenced  dangers 
are  a  handicap  which  it  is  very  easy,  and 
not  at  all  costly,  to  remove,  and  in  many 
States,  as  in  most  foreign  countries,  the  Law 
has  stepped  in  to  force  these  obvious  pre- 
cautions on  careless  employers.  It  is  cer- 
tainly a  case  where  force  is  applied  for  the 
employer's  own  good,  however  blind  he  may 
be  to  the  fact. 

In  all  factories  not  situated  in  the  midst 
of  towns,  the  organization  of  first-aid  to  the 
injured  should  be  one  of  the  protective  ser- 
vices to  be  provided.  In  larger  plants,  this 
may  usefully  be  developed  into  a  regular 
medical  service,  with  or  without  hospital  ac- 
commodation for  emergency  cases.  The  ques- 
tion of  sick  and  benefit  funds,  and  of  work- 
men's compensation  for  accident  is  also  an 
important  one  in  large  plants,  but  in  the 
United  States  as  in  most  industrial  countries 
in  Europe,  it  is  passing  out  of  the  control 
of  the  private  employer  into  the  larger,  if 
not  more  capable,  hands  of  the  State.  It 
would  seem  to  be  only  a  matter  of  time  be- 
fore insurance  of  every  kind  will  be  as  com- 
pulsory on  every  citizen  as  is  the  payment  of 


THE   THIRD   LAW    OF    EFFORT  221 

taxes.  Already  in  some  European  countries 
industrial  insurance  against  sickness,  acci- 
dent and  even  unemployment  is  compulsory, 
and  the  community  undertakes  to  look  after 
the  declining  years  of  its  poorer  citizens  by 
means  of  old-age  pensions.  It  does  not  come 
within  our  province  to  offer  any  comments  on 
this  tendency,  since  universal  application  by 
law  removes  such  questions  from  the  domain 
of  the  science  of  management,  which  has  then 
no  field  for  discussion  nor  any  option  but 
to  apply  them. 

Under  the  head  of  accessory  conveniences 
we  may  enumerate  the  provision  of  meal 
rooms,  with  or  without  kitchens  attached; 
bath  facilities  where  the  nature  of  the  work 
seems  to  call  for  them;  rest  rooms,  and  so 
forth.  Of  these  the  meal  room  is  perhaps 
the  most  important  feature  where  employes 
come  long  distances  to  work.  They  cost 
little  unless  space  is  at  a  premium,  and  espe- 
cially if  provided  with  some  simple  conven- 
iences for  heating  food  brought  ready  pre- 
pared by  the  men,  make  a  distinct  place  for 
themselves  as  promoting  effectiveness  of  the 
employee. 

A  matter  to  be  wisely  guarded  against 
is  the  introduction  of  fussy  rules  as  to  smok- 


222       SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

ing  and  minor  personal  habits.  Such  rules 
are  well  meant,  but  are  apt  to  be  regarded 
as  unwarrantable  interference  with  personal 
liberty,  as  it  must  be  confessed  they  are. 
Grown  men  should  be  treated  as  such,  not 
as  creatures  of  undeveloped  intelligence. 
Outside  the  shops  men  should  be  left  to  them- 
selves as  far  as  is  consistent  with  the  mainte- 
nance of  elementary  order  and  decency  of 
conduct. 

We  have  now  enumerated  some  of  the 
more  important  points  to  be  considered  in 
regard  to  the  physical  welfare  of  the  human 
factor  in  production.  To  elaborate  them  in 
detail  would  require  a  volume  devoted  to  the 
subject.  Some  of  the  points  mentioned  are 
more  neglected  than  many  owners  of  fac- 
tories are  themselves  aware,  because  they 
are  precisely  the  kind  of  arrangements  whose 
efficiency  is  taken  for  granted  on  the  one 
hand,  and  apt  to  be  undervalued  on  the  other. 
But  the  importance  to  old-established  con- 
cerns lies  in  the  fact  that  modern  plants  are 
giving  attention  to  just  these  very  matters, 
and  where  old  and  new  are  in  competition 
they  may  have  considerable  influence  on  the 
obtaining  and  keeping  of  the  best  class  of 
help. 


the  third  law  of  effort  223 

Vocational  Fitness. 

The  next  division  of  the  third  law  of  Effort 
to  claim  our  attention  is  of  a  totally  different 
and  much  more  difficult  and  debatable  char- 
acter. It  is  also  by  far  the  youngest  and  least 
developed  branch  of  the  subject,  having  only 
begun  to  assume  importance  within  the  last- 
few  years.  It  is  the  special  field  of  the  new 
science  of  "Industrial  Psychology"  already 
mentioned.  It  may  be  briefly  described  as  the 
study  of  "Vocational  Fitness' ' — "the  selec- 
tion of  those  personalities  which  by  their 
mental  qualities  are  especially  fit  for  a  par- 
ticular kind  of  economic  work. ' ' 

Actually  the  study  of  vocational  fitness 
gives  rise  to  two  sub-principles  of  the  third 
law  of  Effort,  which,  for  convenience,  and  in 
consideration  of  the  novelty  of  the  subject, 
will  be  treated  together.  These  two  sub- 
principles  are: — 

(2)  Every  vocation  (occupation,  task  or 
duty)  calls  for  special  and  definite  human 
faculties. 

(3)  Every  human  being  has  certain  facul- 
ties more  developed  and  developable  than 
other  faculties. 

As  they  stand  here  these  two  sentences  are 
merely   statements   of   fact.     We   can   now 


224       SCIENCE   AND   PRACTICE    OF   MANAGEMENT 

translate  them  into  the  mandatory  form  in 
which  most  of  onr  principles  have  found  ex- 
pression, as  follows: — 

(2)  The  vocation,  task  or  duty  should  be  an- 
alyzed to  determine  the  special  human  faculty 
concerned. 

(3)  Tests  should  be  applied  to  ascertain  in 
what  degree  candidates  possess  special  faculty. 

It  mnst  be  insisted  at  the  outset  that  this 
new  branch  of  the  science  of  Management  is 
as  yet  almost  unbroken  ground.  The  neces- 
sity for  caution  in  the  matter  has  been  em- 
phasized by  Professor  Muensterberg  him- 
self:— 

A  word  of  warning  may  be  given  beforehand  so 
as  to  avoid  misunderstandings.  These  examples  do 
not  stand  here  as  reports  of  completed  investigations, 
the  results  of  which  ought  to  be  accepted  as  conclu- 
sive parts  of  the  new  psychotechnical  science;  they 
are  not  presented  as  if  the  results  were  to  be  recom- 
mended like  a  well-tested  machine  for  practical  pur- 
poses. Such  really  completed  investigations  do  not 
as  yet  exist  in  this  field.  All  that  can  be  offered  is 
modest  pioneer  work.* 

This  warning  is  needful  especially  if,  as 
seems  likely,  we  are  to  be  over-run  with  a 
new  swarm  of  "experts",  professing  to  de- 

*" Psychology    and    Industrial    Efficiency,"    page    61. 


THE   THIRD   LAW    OF    EFFORT  225 

termine  vocational  fitness  for  employers  at 
short  notice,  because  it  may  fairly  be  as- 
sumed that  there  is  bnt  little  justification  for 
such  claims  at  the  present  time. 

MOTION"   STUD¥  NOT  A  PSYCHOLOGICAL  ANALYSIS. 

The  difference  between  this  psychological 
analysis  and  that  performed  by  time  or  mo- 
tion study  should  be  clearly  understood.  The 
sphere  of  motion  study  is  to  determine  the 
path  and  sequence  of  physical  movements, 
and  the  normal  time  that  should  be  occupied 
in  the  performance  of  each  such  movement. 
It  is  therefore  an  investigation  into  method, 
not  an  investigation  into  faculty.  Motion 
study,  by  reducing  operations  to  their  prime 
and  necessary  elements,  is  enabled  to  com- 
bine these  elements  in  the  shortest  way,  with 
the  least  expenditure  of  effort,  and  there- 
fore in  the  shortest  time.  But  it  does  not 
measure  the  fitness  of  this  or  that  man  for 
the  particular  combination  of  motions  that 
it  has  found  to  be  the  best.  Its  only  rela- 
tion to  the  study  of  vocational  fitness  is  by 
way  of  observing  that  some  men  take  longer 
than  others  to  go  through  the  same  series  of 
motions.  But  it  does  not  attempt  to  throw 
light  on  the  very  important  question  WHY 


226       SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

some  men  are  more  adapted  to  the  particular 
work  than  others. 

It  is  precisely  at  this  point  that  the  new 
science  of  industrial  psychology,  or  psycho- 
technics,  enters  the  field.  It  may  be  well  to 
approach  the  subject  from  the  most  ele- 
mentary point  of  view.  We  may  take  the 
simple  and  well-known  cases  of  railroad  en- 
gineers or  ships'  officers,  with  whom  a  prime 
necessity  of  their  calling  is  that  they  should 
be  able  to  distinguish  between  red  lights  and 
green  lights.  However  fit  in  other  respects 
a  man  may  be  for  either  of  these  vocations, 
unless  he  possesses  a  normal  sense  of  color 
he  is  barred  from  them.  The  important  point 
is,  of  course,  that  such  a  man  is  usually  quite 
unaware  that  other  people  see  green  and  red 
light  differently  from  himself.  Until  a  cor- 
rect test  is  formulated  and  applied,  such  men 
would  readily  undertake  either  of  these  vo- 
cations in  all  innocence  of  their  entire  un- 
suitability  for  them. 

The  case  of  color  blindness  is  a  very  simple 
and  elementary  one,  first  because  the  faculty 
in  question  (that  of  seeing  green  and  red  as 
normal  people  do)  is  clearly  defined  and 
marked  off,  and  secondly  because  the  test 
to  be  applied  is  easily  formulated.     But  as 


THE   THIRD   LAW    OF    EFFORT  22? 

we  shall  see  later,  the  difficulty  begins  when 
we  have  not  only  to  formulate  tests,  but  first 
to  discover  and  delimit  what  faculty  it  is  that 
we  are  to  isolate  and  give  preference  to. 

The  selection  of  the  instance  of  color  blind- 
ness must  not  be  taken  to  suggest  that  the 
sphere  of  industrial  psychology  is  wholly  one 
of  elimination  of  the  unfit.  In  this  particular 
instance  it  is  so,  because  it  happens  that 
color-blind  persons  are  only  a  small  percent- 
age of  the  total  population.  On  the  contrary 
the  real  objective  of  the  new  science  is  selec- 
tion rather  than  elimination.  Its  purpose  is 
not  to  throw  the  square  pegs  out  of  the  round 
holes,  but  to  gently  shepherd  the  round  pegs 
towards  the  round  holes,  and  the  square  pegs 
towards  the  square  holes.  In  the  beginning 
of  its  application,  however,  it  will  be  largely 
eliminative  because  its  opportunities  are  con- 
fined at  present  to  studying  particular  voca- 
tions, and  eliminating  those  unfit  for  them. 
Later  it  will  probably  find  an  opening  in  the 
study  of  the  individual  and  will  point  out  to 
him  which  of  a  wide  range  of  vocations  he  is 
likely  to  succeed  in.  This,  however,  obviously 
cannot  come  to  pass  until  a  large  number  of 
vocations  have  been  studied  by  competent 
psychologists. 


228     science  and  practice  of  management 

Illustrations  of  the  Method. 

Professor  Muensterberg's  investigation 
into  the  causes  of  street  car  collisions  is  an 
interesting  example  of  the  method.  The 
problem  was  (1 )  what  particular  kind  of  fac- 
ulty is  concerned  in  mentally  seizing  on  and 
responding  to  movements  in  traffic  crossing 
the  tracks  in  time  to  prevent  collision,  and 
(2)  how  could  the  presence  or  absence  of 
this  faculty  be  detected  in  candidates.  Pro- 
fessor Muensterberg  says : — 

I  found  this  to  be  a  particularly  complicated  act  of 
attention  by  which  the  manifoldness  of  objects, — the 
pedestrians,  carriages,  and  automobiles, — are  contin- 
uously observed  with  reference  to  their  rapidity  and 
direction  in  the  quickly  changing  panorama  of  the 
street.  ...  In  the  face  of  such  manifoldness  there 
are  men  whose  impulses  are  almost  inhibited  and 
who  instinctively  desire  to  wait  for  the  movement  of 
the  nearest  objects ;  they  would  evidently  be  unfit  for 
the  service  as  they  would  drive  the  electric  car  far 
too  slowly.  Then  there  are  others  who,  even  with 
the  car  at  high  speed,  can  adjust  themselves  for  a 
time  to  the  complex  moving  situation,  but  wliose  at- 
tention soon  lapses,  and  while  they  are  fixating  a 
rather  distant  carriage,  may  overlook  a  pedestrian 
who  carelessly  crosses  the  track  immediately  in  front 
of  their  car.  .  .  .  My  effort  was  to  transplant  this 
activity  of  the  motormen  into  laboratory  processes.* 

*  Psychology  and  Industrial  Efficiency,  Chapter  VIII. 


THE   THIRD    LAW    OF    EFFORT  229 

To  accomplish  this  the  task  was  not  to  re- 
produce "external  similarity  of  the  appar- 
atus, but  inner  similarity  of  the  mental  at- 
titude". After  some  experimenting,  the 
device  of  a  window  ,  moving  over  a  card 
marked  with  heavy  double  lines  representing 
a  track,  and  movable  at  any  desired  speed 
by  the  candidate,  was  adopted.  On  the  card 
were  figures  in  red  and  black,  representing 
items  of  traffic  moving  at  different  speeds, 
both  parallel  and  across  tracks,  and  the  test 
was  for  the  candidate  to  move  the  window  as 
rapidly  as  his  mental  grasp  permitted  and 
call  out  the  distances  at  which  the  different 
items  of  traffic  would  reach  the  track. 

Before  attempting  to  apply  this  test  to 
actual  candidates,  two  demands  had  to  be  sat- 
isfied, and  these  could  only  be  ascertained  ex- 
perimentally. First,  it  was  necessary  to  find 
whether  the  method  of  testing  did  actually 
show  good  results  with  motormen  of  known 
reliability  and  bad  results  with  inefficient 
motormen ;  and  secondly  whether  it  aroused 
vividly  in  all  the  motormen  the  feeling  that 
the  mental  exercise  they  were  going  through 
was  similar  to  their  experience  on  the  plat- 
form of  a  car.  Not  until  these  two  proofs 
were  forthcoming,  and  the  genuine  character 


230     SCIENCE   AND   PEACTICE    OF    MANAGEMENT 

of  the  test  thus  proven,  was  it  applied  in 
practice. 

Professor  Muensterberg's  inquiry  into  the 
mental  qualifications  necessary  for  telephone 
girls  have  been  so  widely  described  that  it  is 
not  necessary  to  include  them  here,  further 
than  to  recall  that  in  addition  to  special  fac- 
tors, a  "general  intelligence  factor"  was 
tested  for  and  made  a  part  of  the  examina- 
tion. This  is  worthy  of  notice,  not  only  be- 
cause some  psychologists  deny  the  existence 
of  such  a  factor,  but  as  shoAving  the  exceed- 
ingly subtle  and  difficult  nature  of  any  in- 
quiry into  human  faculty.  The  allotment  of 
' ' points' '  or  "marks' '  for  success  in  each  of 
a  series  of  tests  must  always  be  of  an  arbi- 
trary character,  though  conceivably  it  may 
be  practically  valuable.  The  human  being, 
moreover,  is  not  the  same  at  one  time  as  at 
another.  At  one  time  a  person  is  "full  of 
life"  and  at  another  time  is  sluggish  and 
slow.  At  one  moment  the  attention  wanders, 
and  at  others  it  is  easily  concentrated.  It 
is  inconceivable  that  the  same  series  of  tests 
applied  under  these  circumstances  at  differ- 
ent times  to  the  same  individual  would  not 
have  different  results,  and  result  in  a  differ- 
ent grading. 


THE   THIRD   LAW    OF    EFFORT  231 

Industrial  psychology  is  therefore  no  field 
for  the  amateur  to  dabble  in,  especially  in 
view  of  the  grave  injustice  that  may  be  done 
to  employes  or  prospective  employes  by 
crude  and  faulty  application  of  such  meth- 
ods. Nevertheless,  it  does  not  seem  impos- 
sible that  some  simple  and  broad  groupings 
of  faculties  can  be  made  and  tests  devised 
for  them,  so  that  obviously  unsuitable  per- 
sons shall  be  excluded  from  positions  they 
would  be  unable  to  fill,  and  on  the  other  hand 
that  certain  faculties  shall  be  recognized  as 
present  to  a  considerable  degree  in  certain 
men,  with  a  view  to  making  use  of  such  fac- 
ulties when  the  question  of  promotion  is  up. 

The  higher  the  post  the  more  difficult  it 
will  be  to  dogmatize  as  to  what  a  given  per- 
son wTill  or  will  not  do,  if  he  is  permitted  to 
fill  the  post.  There  is  even  great  danger  in 
endeavoring  to  stereotype  the  qualifications 
demanded  for  the  higher  posts.  The  danger 
is,  of  course,  that  a  new  departure  in  the  di- 
rection of  progress  may  result  from  the  in- 
cursion of  a  new  type  of  mentality  into  a 
given  field  of  action.  Every  individual's  suc- 
cess is  a  net  balance  between  his  qualities 
that  do  make  for  success  and  those  which  do 
not  make  for  success.     No  one  is  all  good 


232      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

qualities,  or  all  bad  ones.  It  is  only  the  pre- 
ponderance which  counts.  And  the  higher 
the  type  of  activity  the  more  impossible  does 
it  become  to  say,  or  even  guess,  at,  what  the 
net  result  might  turn  out  to  be. 

In  lower  posts,  certain  simple  psychologi- 
cal tests  might  be  possible.  Some  posts  re- 
quire a  good  memory,  others  quick  decision, 
or  selection  of  alternatives,  others  again  de- 
mand a  sturdy  independence  of  character 
which  will  not  yield  to  cajolery  or  descend 
to  petty  "graft".  Some  positions  demand 
suavity,  others  inflexibility  as  their  predom- 
inant feature.  Of  course  all  this  is  nothing 
new.  Men  have  always  been  selected  with 
an  eye  on  their  outstanding  qualities  as  far 
as  these  could  be  seen.  The  new  departure 
is  the  proposal  to  assist  the  judgment — that 
is  the  instinctive  judgment  of  the  ordinary 
man- — by  some  more  definite  instrument  of 
analysis,  some  quantitative  instrument  of 
analysis,  so  that  more  definite  judgments  are 
possible. 

The  whole  subject,  however,  is  so  new  and 
undeveloped  that  employers  need  rather  to 
be  warned  against  possible  extravagances 
than  encouraged  to  rush  into  the  field.  At 
the  same  time  there  is  certainly  the  germ 


THE    THIED    LAW    OF    EFFORT  233 

of  great  future  development  in  the  idea,  and 
therefore  it  must  take  its  place  as  one  of  the 
sub-principles  relating  to  the  promotion  of 
personal  effectiveness. 

Habit 

We  enter  a  much  less  debatable  field  when 
we  consider  the  influence  of  correctly  ac- 
quired habit  on  the  various  officials  and  work- 
ers in  an  industrial  plant,  Nevertheless,  un- 
der the  influence  of  the  new  methods  of  an- 
alysis, particularly  time  study  and  motion 
study,  that  have  been  so  largely  employed 
and  talked  about  of  late  years,  the  enormous 
value  of  habit  as  an  element  of  industrial 
stability  has  been  lost  sight  of  to  some  ex- 
tent. When  industrial  habits  and  customs 
are  all  under  scrutiny  and  criticism,  and 
many  of  them  found  to  be  unwarrantable,  it 
is  natural  that  the  real  place  and  significance 
of  habit  should  be  somewhat  forgotten. 

In  speaking  of  habit  it  must  be  remem- 
bered here  that  we  are  not  concerned  with 
ethics,  but  with  administration.  We  have 
nothing  to  do  with  the  personal  habits  of 
men,  whether  they  drink  or  smoke,  whether 
they  play  cards  or  billiards,  whether  they 
are  meat  eaters  or  vegetarians.     Still  less 


234     SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

have  we  to  concern  ourselves  with  their  men- 
tal habits  outside  of  industry.    We  must  not 
inquire  their  attitude   towards  woman  suf- 
frage,  or  anti-vivisection,   or  whether   they 
are  church  members,   or  whether  they  are 
spendthrifts  or  savers.     Those  are  the  pri- 
vate habits  for  which  each  citizen  is  respon- 
sible only  to  his  own  conscience,  and  it  is 
invading  his  rights  as  a  citizen  to  pretend  to 
control  them  or  even  to  inquire  into  them. 
Even  if  we  persuade  ourselves  that  such  and 
such  habits  in  private  life  tend  to  make  a 
man  a  more  satisfactory  member  of  an  in- 
dustrial organization,  we  must  be  content  to 
abide  by  the  actual  record  of  the  man  in  his 
industrial  capacity,  and  not  carry  our  zeal 
so  far  as  to  invade  his  private  life.    Nothing 
is  more  fraught  with  danger  to  industrial 
peace  than  a  spirit  of  meddlesomeness  with 
matters  that  are  no  real  concern  of  the  em- 
ployer.    He  is  not  his  employees'  keeper — 
indeed  he  has  a  sufficiently  large  task  if  he 
confines  his  horizon  to  the  actions  of  the  em- 
ployee in  his  industrial  capacity. 

With  this  important  reservation  as  to  the 
meaning  of  the  word  habit  we  may  define 
the  fourth  sub-principle  of  the  third  Law  of 
Effort  as  follows : — 


THE   THIRD    LAW    OF    EFFORT  235 

(4)     Habit   should   be   formed   on   standardized 
bases,  old  or  new 

and  as  habit  has  not  one  bnt  many  aspects, 
it  may  be  as  well  to  consider  these  in  some 
detail. 

It  has  been  almost  entirely  overlooked  that 
the  importance  of  the  revelations  made  by 
time  study  and  motion  study  into  operative 
methods,  and  the  discovery  of  great  ineffi- 
ciencies in  the  application  of  labor  to  work, 
is  mainly  in  the  substitution  of  better  habit 
for  that  which  has  been  declared  faulty. 
Firm  progress  can  only  be  assured  by  tak- 
ing the  new  revelations  and  transforming 
them  into  new  habit.  Some  authorities  seem 
to  imagine,  for  instance,  that  there  is  a  posi- 
tive virtue  in  "written  instructions ' '  which 
the  worker  is  expected  to  consult  every  time 
he  performs  the  work.  The  obvious  truth  is, 
of  course,  just  the  opposite  of  this.  Written 
instructions  are  simply  an  unavoidable 
nuisance  in  those  industries  which,  having 
just  been  exposed  to  the  critical  artillery  of 
motion  study,  have  been  found  to  be  all 
wrong  in  their  operative  habit.  They  are 
unavoidable  because,  until  new  habit  has 
been  acquired,  it  is  necessary  to  have  at  hand 
an  authoritative  statement  of  what  is  consid- 


236     SCIENCE   AND    PRACTICE    OE    MANAGEMENT 

erecl  proper  habit,  but  to  regard  them  as  an 
end  in  themselves,  as  many  persons  appear 
to  do,  is  mere  fetish-worship.  The  more 
often  a  given  task  is  repeated  the  less  neces- 
sity for  "  written  instructions ' ',  until  a  time 
comes  when  to  maintain  them  would  be  sim- 
ple foolishness.  In  the  complex  operations 
of  the  machine  shop,  where  the  instructions 
of  design  are  not  really  complete  until  they 
have  specified  not  only  the  work  itself  but 
the  accessory  tools,  jigs,  fixtures  and  attach- 
ments with  which  it  is  to  be  done,  written 
instructions  are,  of  course,  inseparable  from 
the  piece — as  inseparable  as  the  drawing  it- 
self, but  in  few  other  industries  is  there  much 
excuse  for  attempting  to  train  men  in  that 
way. 

The  valuable  idea  underlying  "written  in- 
structions "  is  of  course  the  standardization 
of  methods.  But  this  again  is  nothing  but 
a  long  word  for  "proper  habit".  Now  Mr. 
H.  L.  Gantt,  who  has  been  very  successful  in 
increasing  the  efficiency  of  textile  workers, 
so  far  from  being  able  to  make  use  of  ' '  writ- 
ten instructions"  in  forming  new  and  better 
habit  in  them,  has  achieved  some  of  his  great- 
est successes  among  men  and  women  who 
were  not  only  unable  to  follow  written  in- 


THE   THIRD    LAW    OF    EFFORT  237 

structions,  but  were  not  even  able  to  speak 
English.  They  learnt  to  follow  motions  and 
not  words. 

The  first  line  of  approach  to  the  formation 
of  a  correct  industrial  habit  is,  then,  correct 
operative  habit,  and  this  applies  not  only  to 
the  men  in  the  shops,  but  equally  to  the  mem- 
bers of  all  the  other  organic  functions. 
Though  less  studied  as  yet,  it  will  be  obvious 
that  all  clerical  workers  should  be  encour- 
aged to  form  good  habit  in  carrying  out  the 
steps  of  their  work.  "A  place  for  everything 
and  everything  in  its  place"  is,  for  example, 
one  of  those  homely  adages  that  have  a  prac- 
tical bearing  on  clerical  as  on  all  other  work. 
The  order  in  which  the  daily  routine  is  car- 
ried out  has  often  a  considerable  influence 
on  success.  In  other  words  a  certain  amount 
of  time  and  motion  study,  even  though  of 
an  elementary  character  will  be  found  useful 
in  establishing  good  habit  among  the  rank 
and  file  of  employees  outside  of  the  operative 
function. 

Industrial  value  is,  however,  not  confined 
.to  the  ability  to  go  through  a  series  of  mo- 
tions in  a  given  time,  however  good  a  pro- 
ductive habit  is  created  thereby.  Skill  and 
ability  are  no  doubt  prime  factors,  but  stead- 


238      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

iness,  punctuality  and  long  service  are  also 
factors  that  should  have  weight  in  deter- 
mining a  man's  value  to  the  organization. 
It  is  to  be  feared  that  in  the  zealous  applica- 
tion of  the  new  methods  of  analysis  to  plants, 
too  much  attention  has  been  concentrated  on 
the  pure  skill  factor  and  not  enough  on  these 
other  factors,  by  which  means  valuable  or- 
ganizations have  been  more  or  less  disrupted, 
and  the  gain  made  in  one  direction  lost  in 
another. 

Some  of  the  most  pointed  observations  yet 
made  on  this  subject  will  be  found  in  Mr. 
James  Hartness '  little  book  already  referred 
to;*  and  his  remarks  on  the  necessity  for 
controlling  "progressive  energy",  and  his 
insistence  on  moving  the  worker  along 
"habit  lines"  should  be  read  by  everyone 
interested  in  practical  management.  As  Mr. 
Hartness  truly  says  there  is  an  "Inertia  of 
Habit"  which  is  as  much  a  law  of  human 
nature  as  it  is  of  engineering.  This  being 
the  case  it  is  evident  that  whatever  habit 
exists  throughout  an  organization  can  only 
slowly  be  changed  for  the  better.  Similarly, 
if  through  a  long  term  of  years  an  organiza- 
tion has  been  built  up,  resulting  in  a  steady, 

*  ' '  Human  Factor  in  Works  Management, ' '  Chapter  II. 


THE   THIRD   LAW    OF   EFFORT  239 

more  or  less  contented,  and  faithful  body 
of  employees,  the  industrial  habit  therein 
contained  has  a  very  large  economic  value. 
To  rush  in  and  change  all  these  relations 
and  disturb  all  this  habit  in  the  name  of 
Progress  or  of  Efficiency  is  to  do  a  very  bad 
service  to  the  organization.  Even  though 
analysis  should  reveal  that  everything  that 
can  be  done  badly  is  being  done  badly,  there 
is  still  the  asset  of  organic  solidarity  that 
remains,  and  this  should  be  preserved  at 
all  hazards.  "Festina  Lente" ,  "Hasten 
Slowly",  should  be  the  motto  of  every  one 
who  undertakes  to  introduce  "betterment" 
into  an  established  plant. 

The  relation  between  this  aspect  of  habit 
and  "standardized  methods"  may  not  be 
very  clear  to  those  that  connect  the  latter 
phrase  w7ith  something  new  and  perhaps  rev- 
olutionary. Standardized  methods  are  not 
necessarily  new  methods.  Of  course  a  stand- 
ardized method  is  any  method  that  is  recog- 
nized as  too  good  to  be  altered,  or  as  the 
best  that  can  be  attained  or  expected.  Among 
these  the  habit  of  punctuality  is  certainly  a 
standardized  method — a  regular  compliance 
with  the  standard  of  attendance  set  up  by 
the  firm.    Steadiness  and  reliability  are  also 


240     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

compliances  with  standards,  even  though  un- 
written standards.  Long  service  may  or  may 
not  be,  just  as  the  firm  consider  it  a  merit  or 
not.  But  it  certainly  should  be  so  regarded, 
and  we  may  regard  life-long  service  as  the 
standard  to  which  every  employe  is  getting - 
nearer  as  the  years  pass. 

Thus  we  are  able  to  observe  the  desira- 
bility of  fostering  good  habit  in  all  these  di- 
rections, remembering  always  that  habit  has, 
as  Mr.  Hartness  says,  inertia,  and  can  there- 
fore be  changed  only  slowly.  The  subject 
is  capable  of  much  greater  development  than 
has  been  made  here,  but  its  most  important 
features  have  been  mentioned. 


Chapter    X 

PEACTICAL  APPLICATION  OF  THE  THIED 
LAW  OF  EFFOET  (Continued) 

ESPRIT  DE   CORPS 

'T* HOUGH  the  phrase  esprit  de  corps  is 
sometimes  translated  by  "team 
work,"  this  is  not  an  exact  equivalent,  yet 
perhaps  the  nearest  approach  that  the  Eng- 
lish language  allows.  It  omits,  however,  a 
very  important  shade  of  meaning,  namely  the 
feeling  of  pride  in  the  group — originally  in 
the  corps  or  regiment — of  which  the  members 
form  part.  The  Cornishman's  motto  "Each 
for  all  and  all  for  each"  has  also  something 
of  this  spirit,  though  on  a  lower  plane  of 
thought.  Generally  speaking  it  may  be  said 
to  include  the  American  conception  of  team 
work  phis  pride  of  organization,  implying 
though  not  expressing  a  superiority  to  the 
outside  mortals  not  fortunate  enough  to  be- 
long to  it. 

In  some  industrial  concerns  esprit  de  corps 
is  strongly  developed.     The  "Company"  is 
241 


242        SCIENCE   AND    PRACTICE    OF   MANAGEMENT 

personified  and  made  an  object  of  regard  and 
even  of  reverence.  Where  this  feeling  exists 
it  has  very  great  economic  value.  It  is  usu- 
ally evidence  of  the  passage  or  the  presence 
of  some  strong  and  kindly  personality  whose 
influence  has  permeated  the  organization, 
and  tinged  it,  so  to  speak,  with  a  robust  form 
of  sentiment.  But  in  other  cases  this  desir- 
able spirit  is  wholly  absent. 

The  value  of  esprit  de  corps  is  so  great 
(though  in  a  world  of  change  it  is  apt  to  be 
undervalued  if  not  overlooked)  that  it  must 
be  regarded  as  one  of  the  main  engines  for 
the  promotion  of  personal  effectiveness.  For 
this  reason  we  may  include  it  under  the  Third 
Law  of  Effort,  as  forming  the  fifth  sub- 
principle  of  that  law : — 

5.     Esprit  de  corps  must  be  fostered. 

It  may  be  confessed,  however,  that  it  is 
far  more  easy  to  lay  down  this  principle, 
however  obviously  true  it  may  be,  than  to 
state  how  the  thing  is  to  be  done.  For  esprit 
de  corps  is  so  much  the  outcome  of  personal- 
ity— the  personality  of  the  man  or  men  at 
the  head,  that  it  is  too  elusive  to  be  reduced 
to  words,  or  rules.  Nevertheless,  we  may 
turn  over  the  subject  so  as  to  see  what  it  is 


THE   THIRD   LAW   OF   EFFORT  243 

that  should  be  aimed  at.  The  possibility  of 
developing  it  is  based  on  a  peculiarity  of 
human  nature.  Humanity  being  gregarious 
— that  is,  having  an  instinct  to  associate  in 
groups — it  follows  naturally  that  each  of  us 
has  a  tendency  to  declare  and  even  to  believe 
that  our  own  group  is  a  mighty  superior 
kind  of  group.  The  accident  of  our  being 
born  in  an  Anglo-Saxon  country  gives  many 
a  kind  of  pity  for  the  benighted  peoples  not 
so  born.  The  Christian  is  sorry  for  the  Brah- 
min and  the  Brahmin  looks  down  on  the 
Mahommedan.  The  inhabitant  of  a  metropo- 
lis always  has  a  kind  of  condescension  for 
the  provincial ;  the  men  of  certain  regiments 
in  most  countries  believe  that  their  regi- 
ment alone  is  the  true  fighting  force  of  the 
State;  to  belong  to  certain  clubs  is  consid- 
ered as  an  immensely  more  valuable  priv- 
ilege than  to  belong  to  certain  other  clubs; 
in  short,  the  whole  world  is  divided  into 
groups,  each  of  which  looks  upon  other  sim- 
ilar groups  with  a  calm  superiority,  that  in 
four  cases  out  of  five  has  very  little  founda- 
tion in  reason. 

But  though  under  the  cold  light  of  reason 
this  group-pride  has  frequently  little  founda- 
tion in  fact,  it  has  nevertheless  great  moral 


244       SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

force.  It  generates  energy,  both  aggressive 
and  resistive.  The  man  who  believes  in  his 
group  will  make  sacrifices  for  its  welfare. 
He  will  be  ready  to  maintain  its  superiority 
against  all  comers.  And  he  will  be  ready  and 
anxious  to  identify  himself  with  its  inner  life 
and  amalgamate  himself  as  thoroughly  as 
possible  with  its  traditions  and  customs.  In 
Chapter  VI  of  his  book,  Mr.  Hartness  speaks 
of  "Confidence  .  .  .  born  of  a  knowledge  of 
the  superiority  of  existing  things — things 
that  may  not  be  perfect  but  are  nevertheless 
best".  This  is  in  fact  a  fairly  good  defini- 
tion of  the  condition  of  mind  produced  by  a 
lively  sense  of  esprit  de  corps. 

Can  we  picture  to  ourselves  any  of  the 
conditions  that  give  rise  to  this  state  of 
mind!  To  a  limited  extent  we  can.  A  man 
finding  himself  in  the  position  of  a  unit  in  a 
large  group,  such  as  a  manufacturing  plant, 
will  tend  to  form  esprit  de  corps  if  he  finds 
around  him  an  atmosphere  of  justice  and 
fair-play,  of  leadership  in  which  he  can  con- 
fide, of  recognition  of  his  efforts  (not  neces- 
sarily or  always  monetary  recognition),  of 
decent  conditions  under  which  he  can  retain 
and  augment  his  self-respect.  All  these 
personal  influences   are   necessary,   without 


THE   THIKD   LAW   OF   EFFORT  245 

doubt,  yet  there  must  be  something  more 
than  this. 

An  essential  feature  is  belief  in  the  pur- 
pose for  which  the  group  exists.  In  industry 
this  means  belief  in  the  product  itself  and  in 
the  public  recognition  of  its  value.  If  a  man 
works  in  the  dark,  without  perceiving  the  end 
and  aim  of  his  labors,  he  is  not  likely  to  de- 
velop a  lively  sense  of  esprit  de  corps.  But 
open  up  to  him  some  of  the  excitement  of 
propaganda,  let  him  share  in  imagination  in 
the  work  of  the  organization  as  a  whole,  and 
his  interest  is  sure  to  be  both  widened  and 
intensified.  Let  him  feel  that  he  is  one  of 
the  players  in  the  great  game,  and  he  will  be 
much  more  inclined  to  do  all  he  can  to  help 
the  game  forward,  even  though  his  personal 
share  in  it  is  a  small  and  unimportant  one. 
To  him  it  will  soon  seem  neither  small  nor 
unimportant,  because  it  is  a  principle  of 
human  nature  to  magnify  one's  own  place  in 
the  world  and  to  believe  that  our  position, 
our  work,  are  pivotal  matters,  round  which 
the  universe  revolves.  To  neglect  the  foster- 
ing of  this  excellent  and  happy  frame  of  mind 
is  to  throw  away  great  assets. 

Just  how,  in  practical  affairs,  this  is  to  be 
effected,  is,  of  course,  a  somewhat  difficult 


246        SCIENCE   AND   PRACTICE   OE   MANAGEMENT 

problem,  needing  careful  consideration  in 
each  case.  But  the  broad  outlines  are  clear 
enough.  Every  industrial  group  is  in  effect 
an  army  marching  to  the  conquest  of  the 
world.  Its  battlefields  are  the  offices  of  its 
customers.  It  has  its  territory  already  oc- 
cupied in  force,  its  territories  in  which  the 
flag  is  only  shown,  its  territories  undergoing 
survey,  its  territories  as  yet  wholly  beyond 
its  sphere  of  operations.  It  has  its  days  of 
triumph,  when  large  and  satisfactory  orders 
are  secured.  It  has  also  periods  of  struggle 
and  difficulties,  when  the  army  must  march 
in  close  order  with  carefully  guarded  flanks — 
the  days  of  industrial  depression,  when  the 
question  is  not  so  much  to  make  fresh  con- 
quests, but  to  keep  what  one  has. 

Some  few  firms  have  begun  to  use  this  ar- 
ray of  stimulating  facts  to  promote  esprit 
de  corps,  at  least  among  their  sales  force, 
but  where  it  is  really  wanted  is  among  the 
whole  body  of  employees.  In  a  large  plant 
a  new  kind  of  publicity  service  seems  needed, 
not  to  impress  the  imaginations  of  the  world 
outside,  but  to  develop  the  interest  of  the 
world  inside  the  factory  gates. 

Suppose  for  instance  some  machinery  has 
been  shipped  to  a  mine  in  South  America, 


THE  THIRD  LAW  OF  EFFORT  247 

and  that  photographs  have  been  secured  of 
its  passage  on  mule-back  across  some  An- 
dean pass,  or  across  some  turbulent  river, 
and  its  arrival  at  its  destination  in  some  wild 
end  of  the  world.  Would  not  the  exhibition 
of  these  pictures  profoundly  interest  the  men 
who  had  made  that  machinery,  who  had 
watched  it  being  made — who  had  written  the 
orders  for  its  making,  who  had  handed  out 
the  materials  for  its  making?  Nothing  more 
so,  yet  how  often  is  it  done? 

Or  suppose  a  product  that  is  fighting  its 
way,  from  city  to  city,  from  county  to  county, 
from  State  to  State,  from  the  home  to  the 
foreign  markets.  Is  it  possible  that  a  great 
map,  on  which  the  successive  stages  of  this 
progress  were  shown  graphically,  would  have 
no  interest  to  the  men  who  were  devoting 
their  lives  to  making  that  product  ?  The  pas- 
sengers on  an  ocean  liner  find  interest  in  the 
day's  run  of  the  ship,  though  they  have  no 
share  in  bringing  about  the  result.  Is  it 
not  likely  that  men  would  follow  with  still 
keener  interest  the  fortunes  of  a  product  that 
they  themselves  help  to  make,  and  on  which 
all  their  prosperity  is  dependent? 

Synthesis,  as  was  pointed  out  in  a  preced- 
ing chapter,  is  the  great  instrument  by  the 


248        SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

skilful  use  of  which  the  management  will  ul- 
timately have  to  stand  or  fall.  Now  esprit 
de  corps  is  the  perfect  synthesis  of  the  good- 
will of  individuals.  It  is  the  most  important 
thing  of  all  to  secure  and  the  most  difficult 
thing  of  all  to  secure.  It  is  a  strong  moral 
force,  tending  to  polarize  the  wills. of  men 
in  one  direction,  namely  that  of  furthering 
the  efforts  of  the  group.  But  because  it  is 
a  moral  force,  it  cannot  be  brought  about  by 
mechanism  alone.  It  is  an  outcome  of  per- 
sonality in  essence,  and  no  system  of  man- 
agement, no  rules,  no  cut  and  dried  princi- 
ples, can  supply  the  place  of  a  fine  person- 
ality at  the  head  of  affairs.  And  this  brings 
us  to  another  important  matter — the  differ- 
ence between  esprit  de  corps  and  enthusiasm. 
When  many  people  speak  of  enthusiasm  as 
a  fine  force  in  business,  they  are  really 
meaning  esprit  de  corps.  Enthusiasm  is  not 
a  workable  proposition,  because  it  is  not  a 
steady  enduring  force.  It  is  up  and  down,  a 
kind  of  mental  revivalism  that  is  evanescent. 
Enthusiasm  is  an  excellent  thing  in  a  crisis, 
but  if  we  rely  on  it  as  a  working  force,  we 
shall  have  confusion  before  long,  because  it 
is  a  conscious  exercise  of  the  imagination 
and  the  will,  and  cannot  be  kept  up.     The 


THE  THIRD  LAW  OF  EFFORT  249 

man  who  is  naturally  enthusiastic  is  nearly 
always  unstable  and  unreliable.  His  mind 
is  apt  to  run  up  side  roads,  to  be  diverted 
hither  and  thither.  Much  of  the  scrappiness 
of  modern  life  is  due  to  the  fact  that  things 
are  done  under  waves  of  enthusiasm — that 
is,  of  necessity  badly,  because  hastily. 

Esprit  de  corps  should  generate  enthusi- 
asm wrhen  the  need  exists  for  it.  Soldiers 
cheer  when  making  a  charge,  but  they  do  not 
spend  their  lives  in  cheering.  The  salesman 
should  feel  enthusiasm  when  face-to-face 
with  his  competitors,  or  with  some  intract- 
able purchaser,  but  calm  consciousness  of 
"the  superiority  of  existing  things"  should 
be  his  normal  state  of  mind.  Similarly,  when 
we  speak  of  the  essence  of  esprit  de  corps 
being  personality,  we  do  not  mean  that  the 
man  at  the  head  of  affairs  should  be,  in  the 
language  of  the  Salvation  Army  "always  on 
the  mountains'',  that  is,  always  under  the 
stress  of  enthusiasm.  On  the  contrary,  the 
less  of  that  quality  he  has  in  his  make-up 
the  more  his  chances  for  success.  What  he 
wants  is  calm  but  intense  belief  in  himself, 
in  his  mission,  in  his  men,  in  the  power, 
strength  of  purpose,  and  justification  of  aim 
of  his  organization. 


250      SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

Within  the  plant  itself  there  is  also  the  op- 
portunity for  developing  local  esprit  de 
corps.  Each  of  the  organic  functions  forms 
a  group  sufficiently  distinct  from  the  other 
groups  to  feel  a  common  consciousness.  The 
Designing  group,  the  Equipment  group, 
have  for  example  a  wholly  different  outlook, 
and  indeed  a  different  mentality,  from  the 
Operating  group  or  the  Comparison  group. 
How  can  this  essential  difference  of  mental 
outlook  be  used  to  develop  esprit  de  corps 
within  the  function?  Of  course,  when  any 
of  these  functions  is  only  slightly  developed 
in  a  plant,  such  as  the  designing  function  in 
a  chemical  industry,  nothing  in  that  way  can 
be  done.  But  where  the  functions  are  devel- 
oped so  that  many  men  are  employed  in  each, 
then  something  may  be  attempted. 

The  idea  to  be  kept  in  mind  is  that  of  gen- 
erating interest  in  the  common  daily  happen- 
ings of  the  plant,  and  particularly  of  the 
function  itself.  There  is  nothing  more  high- 
flown  than  this  required.  In  a  sense  it  is 
what  may  be  termed  the  scientific  use  of  gos- 
sip, or  rather  of  the  ineradicable  tendency 
of  mankind  to  gossip.  Where  everything  in 
a  plant  is  held  down  under  a  heavy  weight 
of     strenuousness,    very    little    is     accom- 


THE  THIED   LAW   OF   EFFORT  251 

plished.  "Stone  walls  do  not  a  prison  make, 
nor  iron  bars  a  cage",  is  as  adapted  to  an 
industrial  organization  as  to  a  jail.  We  can 
control  the  body  to  some  extent,  bnt  we  can- 
not coerce  the  mind.  If  onr  work  is  uninter- 
esting, the  mind  will  wander  away  in  spite  of 
us  to  tomorrow's  or  last  week's  ball  game,  to 
the  book  we  are  reading  at  home,  to  a  dozen 
other  things  not  very  pertinent  to  the  work 
in  hand.  It  will  not  wander  the  less  if  we 
are  but  a  small  wheel  in  a  big  machine,  with 
no  very  clear  or  lucid  idea  of  the  exact  utility 
of  the  work  we  are  doing  to  earn  our  living. 

The  problem  of  local  esprit  de  corps  is 
therefore  to  give  current  daily  interest  to 
each  man's  work,  to  provide  food  for  his  er- 
rant thoughts,  for  his  imagination,  so  that 
he  will  not  look  on  his  life  within  the  office 
or  shop  as  drudgery  to  which  his  noble  spirit 
stoops,  indeed,  but  unwillingly.  Make  him 
a  world  to  live  in  within  the  organization,  and 
his  thoughts  will  not  so  readily  fly  to  the 
greater  world  without.  Local  esprit  de 
corps,  that  is,  within  each  function,  is  so  nar- 
row a  field,  even  in  a  large  plant,  that  most 
of  the  influences  that  can  be  brought  to  bear 
must  be  considered  presently  under  the  head 
of  Incentive.    But  the  point  here  is  that  each 


252      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

function  is  a  little  world  of  itself,  with  com- 
mon interests  and  needs,  and  that  something 
can  perhaps  be  done  to  make  these  interests 
appreciated  by  everyone,  and  make  everyone 
anxions  to  promote  them,  not  for  personal 
ends  but  for  the  sake  of  esprit  de  corps. 

A  concrete  example  may  be  taken  in  the 
case  of  the  power  service.  The  efficiency  of 
the  power  service  depends  on  many  factors 
and  the  co-operation  of  many  individuals. 
There  are  standards  to  be  maintained,  and 
definite  results  to  be  gotten.  In  other  words 
we  have  here  an  example  of  a  local  group 
in  which  the  fostering  of  esprit  de  corps  may 
be  assisted  by  suitable  arrangements.  It  will 
be  remembered  that  we  have  defined  one  of 
the  necessities  of  the  situation  as  belief  in 
the  purpose  for  which  the  group  exists.  This 
being  established  we  must  connect  the  work 
of  the  individual  with  the  realization  of  the 
purpose,  and  assist  him  to  see  the  importance 
of  his  own  share  in  the  result. 

Now  the  purpose  or  purposes  for  which  the 
group  exists  is  clearly  definable  in  this  case. 
It  is  to  generate  power  and  attain  a  certain 
efficiency  in  doing  so.  It  may  be  also  to  keep 
up  pressures  or  temperatures,  to  maintain 
vacua,  and  so  forth.     All  these  things  are 


THE  THIRD   LAW   OF   EFFORT  253 

the  subject  of  Record  and  Comparison,  and 
what  is  easier  than  to  make  the  results  pub- 
lic property  as  far  as  the  group  concerned 
in  establishing  them  is  concerned?  One  day 
the  fuel  consumption  will  be  high  and  an- 
other low;  one  day  the  pressure  will  fall  off 
through  someone's  fault,  or  by  some  acci- 
dental cause;  perhaps  another  day  some 
heavy  demand  will  be  experienced  and  suc- 
cessfully met — a  matter  of  pride  to  those  re- 
sponsible. 

.These  seem  trifling  matters  compared  with 
the  total  life  of  the  whole  plant,  but  if  judi- 
ciously made  public,  they  would  afford  sub- 
jects of  comment,  of  discussion,  of  gossip 
if  you  will,  to  the  power-plant  group,  and 
tend  to  make  each  one  realize  that  he  was 
engaged  in  an  interesting  occupation,  on 
which  a  great  deal  depended. 

Similarly,  with  regard  to  that  part  of  the 
Equipment  group  concerned  with  mainte- 
nance and  repair.  Here  a  clean  slate  would 
be  the  thing  to  aim  at,  but  it  would  perhaps 
rarely  be  realized.  The  prevention  of  acci- 
dents, of  breakdowns  and  delays,  would  cer- 
tainly be  assisted,  if  each  event  was  pub- 
lished, with  judicious  comments  on  its  re- 
sults, and  on  what  might  have  been  done  to. 


254      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

prevent  it.  Again,  a  repair  staff  has  fre- 
quently to  work  hard  and  long  on  some  ur- 
gent repair.  What  more  likely  to  give  en- 
couragement than  some  means  of  public  rec- 
ognition of  such  work,  some  bulletin  notice 
giving  credit  where  it  was  due  ? 

In  the  above  suggestions  we  have  under- 
lined the  word  "judicious",  for  that  is  the 
kernel  of  the  problem.  It  has  already  been 
remarked  that  the  fostering  of  esprit  de 
corps  is  in  the  end  a  matter  of  personality. 
The  mechanism  just  described  is  only  mech- 
anism— whether  it  be  successful  or  not  will 
depend  on  the  personality  of  the  higher  offi- 
cial who  is  entrusted  with  apportioning 
praise  and  blame.  A  very  judicial  as  well 
as  judicious  man  is  necessary.  The  object 
is  not  to  establish  a  mutual-admiration  soci- 
ety, neither  is  it  to  set  up  an  engine  of  scold- 
ing and  worrying.  Either  of  these  tendencies 
will  defeat  the  object  in  view.  Even-tem- 
pered justice  is  the  first  requisite  for  any 
measure  of  the  sort.  Men  will  always  re- 
spect justice  in  the  long  run  even  if  some- 
times it  falls  on  themselves. 

Team  work  and  co-operation  are  not  the 
same  thing  as  esprit  de  corps,  though  they 
are  an  essential  element  of  it.     Neither  of 


THE  THIRD   LAW   OF   EFFORT  255 

them,  however,  is  usually  more  than  the  re- 
sponse to  some  unusual  stimulus  or  incen- 
tive, unless  they  are  actually  the  outcome  of 
an  existing  esprit  de  corps.  Therefore  they 
are  rather  a  result  of  esprit  de  corps,  gener- 
ated by  it  in  the  natural  course  of  events. 
They  cannot  be  permanently  established 
without  it.  To  speak  therefore  of  a  spirit 
of  co-operation  is  rather  a  misnomer.  Co- 
operation is  not  an  end  in  itself;  it  is  a  re- 
sult of  something.  Men  will  not  co-operate 
for  the  sake  of  co-operating,  but  they  will 
co-operate  to  gain  some  definite  end.  This 
end  may  be  a  tangible  one,  like  some  special 
bonus,  or  an  intangible  one  like  upholding 
the  honor  of  the  flag,  or  the  credit  of  the 
plant.  It  is  hardly  necessary  to  state  that 
the  latter  class  of  co-operation  is  the  most 
valuable,  because  it  alone  is  due  to  esprit  de 
corps,  that  is  to  a  larger  issue  that  controls 
the  will  of  men  unconsciously. 

While  good  physical  conditions,  as  indi- 
cated by  the  first  sub-principle  of  the  Third 
Law  of  Effort,  do  not  give  rise  to  esprit  de 
corps  they  are  a  valuable  influence  in  its 
favor.  But  the  moral  atmosphere  is  still 
more  important — that  is,  whether  or  not  the 
worker  feels  that  he  has  fair  play,  that  his 


256     SCIENCE  and  PRACTICE  of  management 

efforts  are  appreciated,  that  lie  is  treated  as 
a  man  and  not  as  a  child  or  a  piece  of  mech- 
anism, and  that  he  is  a  working  and  indis- 
pensable unit  in  a  large  whole,  of  which  he 
can,  to  some  extent  at  least,  perceive  the  ob- 
jective and  the  drift. 

Since  the  above  was  written  a  recent  con- 
tributor to  a  technical  paper  has  given  what 
purports  to  be  the  gist  of  a  shop  conversa- 
tion over  the  after-dinner  pipe,  on  the  sub- 
ject of  "What  makes  a  shop  pleasant  to 
men".  From  this  is  extracted  the  following 
word  picture  of  the  men's  idea  of  a  good 
shop : — 

The  talk  became  general,  and  several  things  came 
out  very  plainly.  The  shops  that  offered  steady 
work  at  the  highest  prices  seemed  to  have  the  most 
friends,  but  it  took  quite  a  difference  in  wages  to 
offset  some  other  things.  The  highest  praise  for  a 
shop  was  not  beautiful  buildings,  or  welfare  work, 
but  was  told  in  an  expression  that  every  man  who 
had  been  around  much  seemed  to  fully  understand, 
and  it  was:  "and  they  treat  you  right." 

While  these  men  all  seemed  to  comprehend  the 
meaning  and  high  praise  of  the  expression,  it  is  one 
that  is  not  easy  to  interpret  to  the  man  who  is  not  a 
shop  man  from  the  bottom  up,  but  in  general  terms 
it  meant  a  shop  with  a  sufficient  mixture  of  the  fol- 
lowing good  points. 

The  men  in  authority  understood  the  work  and 
judged  fairly  of  a  man's  accomplishments.     Xeeded 


THE   THIRD   LAW   OF   EFFORT  257 

assistance  was  easy  to  get  when  needed;  accidents 
and  bad  work  were  investigated  before  judgment 
was  pronounced;  work  was  so  provided  that  a  man 
did  not  need  to  worry  about  a  supply  of  it;  a  suffi- 
cient quantity  of  accessories  was  readily  available; 
troubles  and  dissatisfaction  could  be  told  to  some- 
one with  power  to  act;  enough  attention  was  paid  to 
individuals  to  tell  a  good  man  from  a  poor  one.  The 
system  used,  as  it  touched  the  men,  seemed  reason- 
able and  necessary ;  the  ones  in  authority  acted  as 
though  they  recognized  that  shop  men.  were  also,  in- 
telligent human  beings  with  some  brains;  a  moral 
atmosphere  that  seemed  to  assume  that  the  men 
were  willing  and  trying  to  do  right  by  the  shop. 

This  last  point  may  not  appeal  to  some  as  be- 
longing to  a  machine  shop,  but  it  is  a  very  real  one 
for  all  of  that.  In  some  shops  the  system,  or  the 
way  it  is  applied,  seems  to  say :  "You  are  naturally 
a  stinker,  but  we  are  on  to  you  and  it  won't  go  here. 
We  can  and  will  keep  track  of  you  from  the  minute 
you  come  in  in  the  morning  until  you  get  out  of  the 
door  at  night,  so  get  right  in  line  and  stay  there,  or 
out  you  go." 

In  other  shops  the  system,  or  the  way  it  is  ap- 
plied, seems  to  assume  that  the  men  are  reasonably 
honest  and  willing,  and  only  need  directing  instead 
of  watching.  Applied  long  enough  and  rigidly 
enough  each  shop  will  be  found  to  tend  toward  be- 
ing filled  with  such  men  as  the  system  fits,  and  it  is 
because  of  the  management,  and  should  not  be 
blamed  on  the  men. 

Among  the  things  that  were  most  often  com- 
plained of  about  unpopular  shops  were  unjust  treat- 
ment by  foremen;  supercilious  treatment  by  some 
cheap  clerk,  whose  position  made  him  an  errand 
boy  between  the  shop  and  the  office,  but  who  acted, 


258      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

and  was  allowed  to  act,  as  though  he  was  owner,  or 
more,  for  a  man  with  brains  enough  to  be  owner 
seldom  acts  in  that  way;  an  insufficient  supply  of 
such  things  as  bolts,  clamps,  dogs,  chisels,  files,  and 
so  forth.  It  is  surprising  to  know  that  this  is  a 
complaint  that  is  made  against  some  shops  that  are 
called  up-to-date.  Shops  in  which  the  tools  and  the 
shops  are  modern,  but  where  the  work  is  held  back 
because  of  the  little  things,  and  the  ceremony  and 
trouble  which  attend  getting  a  needed  quantity  of 
them.  — W.  Osborn,  in  American  Machinist,  Mar. 
12,  1914. 


Chapter   XI 

PRACTICAL  APPLICATION  OF  THE  THIRD 
LAW  OF  EFFORT  (Continued) 

INCENTIVE 

npHE  fourth  sub-principle  of  the  Second 
■*■  Law  of  Effort  is  to  the  effect  that 
"effort  must  be  remunerated".*  In  apply- 
ing this  sub-principle  to  each  Function  its 
aim  was  declared  to  be  the  isolation  of  spe- 
cially valuable  kinds  of  effort  for  the  appli- 
cation of  incentive.  The  Second  Law  of  Ef- 
fort does  not  pretend  to  deal  with  Incentive 
as  such,  but  only  occupies  itself  with  finding 
out  what  types  of  effort  are  specially  import- 
ant in  each  function.  It  remains  therefore 
to  complete  this  by  considering  Incentive  in 
the  abstract — what  it  is,  how  it  acts  and  what 
its  range  or  scope  should  be.  This  brings  us 
to  the  sixth  sub-principle  of  the  Third  Law 
of  Effort :  namely,  that : — 

*See  Chapter  VIII,  page  196. 
259 


260      SCIENCE   AND   PEACTICE    OF    MANAGEMENT 

6.     Incentive  must  be  proportioned  to  effort  ex- 
pected 

The  first  question  we  have  to  ask  is  "What 
is  Incentive  1 ' '  The  answer  is,  in  general 
terms,  that  incentive  is  that  which  moves 
human  beings  to  effort.  The  less  incentive, 
the  less  effort.  The  sociological  law  of  Par- 
simony tells  us  that  human  beings  will  al- 
ways seek  the  path  of  least  effort  to  attain 
a  given  end;  consequently  we  find  that  in 
those  countries  where,  as  in  the  tropics,  life 
can  be  maintained  by  men  with  almost  as 
much  ease  as  by  vegetables,  absence  of  in- 
centive results  in  absence  of  effort,  and  men 
vegetate  in  sloth  without  trying  to  rise  to 
greater  levels  of  culture. 

Incentive  may  be  naturalor  artificial.  It 
may  arise  from  the  spur  of  Nature  or  from 
the  needs  of  civilization.  Hunger,  cold,  and 
wet  are  examples  of  the  first.  Each  of  them 
is  an  incentive  to  man  to  get  up  and  do  some- 
thing for  himself.  These  spurs  are  also  felt 
in  civilized  society  by  the  weak  or  unfortun- 
ate, but  to  the  great  mass  of  civilized  men 
these  iron  hands  are  concealed  by  the  velvet 
glove  of  employment.  The  employed  man, 
however  humble,  is  at  least  freed  from  the 
stern  incentives  of  hunger,  cold,  and  wet. 


THE   THIRD   LAW   OF   EFFORT  261 

From  this  point  we  pass  upwards.  All  men 
are  not  alike,  either  in  their  powers  or  as- 
pirations. The  strange,  but  universal  law 
of  Average  in  Faculty  shows  that  in  every 
large  unorganized  group  of  men,  the  great 
mass  will  have  a  medium  development  of 
faculty,  and  above  and  below  this,  mass  will 
be  smaller  masses  having  development  both 
above  and  below  the  average.  As  we  near 
the  confines  of  the  curve,  we  shall  find  that 
a  relatively  few  individuals  will  have  ex- 
tremely low  development  and  about  the  same 
number  will  have  extremely  high  develop- 
ment.* This  sociological  law  appears  to  hold 
good  for  whatever  faculty,  moral  or,  mental, 
we  examine  great  masses  of  men.  Now  the 
principle  of  Incentive  rests  on  this — that 
hardly  any  men,  except  those  whose,  devel- 
opment is  far  below  the  average,  are  free 
from  a  desire  to  progress  a  little,  to  enjoy 
more,  to  receive  more  consideration  from 
their  fellows,  to  do  a  little  better  on  the 
whole  than  they  did  at  the  outset. 

This  at  once  brings  -us  to  an  important 
element  in  Incentive.  It  may  be  either  moral 
or  material.  If  for  the  most  part  it  is  ma- 
terial at  the  present  day,  that  is  because  we 

*  ' '  Human  Faculty, ' '   Sir  Francis   Galton. 


262      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

have  fallen  into  the  habit  just  at  present  of 
valuing  a  man  by  the  amount  of  his  material 
possessions.  Millions  are  more  easily  rec- 
ognizable than  worth,  and  not  only  more  rec- 
ognizable, but  much  less  easily  counter- 
feited. But  even  today,  material  incentive 
has  not  the  whole  field  to  itself.  Fame,  honor 
and  public  esteem  have  not  ceased  to  be  in- 
centives, though  they  are  less  powerful  in- 
centives than  formerly.  Even  in  industry, 
which  is  in  itself  merely  the  development  of 
material  resources,  men  respond  to  other  in- 
centives than  dollars,  and  this  being  so  the 
matter  becomes  of  practical  importance. 

Having  defined  Incentive  as  that  which 
moves  men  to  effort,  we  may  next  ask  in* 
what  way  does  Incentive  act?  Can  we  over- 
do Incentive?  If  men  are  of  various  grades 
of  capacity  must  the  Incentive  be  graded 
in  correspondence?  If  Incentive  is  of  two 
kinds,  moral  and  material,  do  these  forms 
act  in  dissimilar  ways?  If  so,  is  it  possible 
to  combine  them  to  act  on  the  individual? 
Can  Incentive  be  made  to  assist  in  foster- 
ing habit  and  esprit  de  corps?  All  of  these 
are  very  important  questions,  and  we  shall 
find  that  all  of  them  can  be  answered  in  the 
affirmative. 


THE  THIKD  LAW  OF  EFFORT  263 

All  of  these  questions  are  in  fact  summed 
up  in  our  sixth  sub-principle  that  "Incen- 
tive must  be  proportioned  to  Effort  ex- 
pected". That  we  can  overdo  Incentive 
seems  easily  deducible  from  the  sub-prin- 
ciple, and  in  fact  it  is  easy  to  overdo  it.  If 
we  offer  too  large  a  reward  for  a  given  re- 
sult, one  of  several  unexpected  things  may 
happen.  First,  if,  as  is  assumed  in  the  prem- 
ises, the  reward  is  beyond  what  the  man 
would  normally  expect,  he  will  quite  possibly 
not  go  all  the  distance  after  it.  He  will  be 
content  with  doing  part  of  the  work,  and  get- 
ting part  of  the  reward.  In  some  trades, 
particularly  in  England,  where  wages  have 
been  forced  up  by  powerful  trade  unions 
high  above  the  average  of  the  class,  the 
workers  in  these  trades  will  not  work  a  full 
week;  they  prefer  to  make  what  they  con- 
sider sufficient  for  their  wants,  and  idle  the 
rest  of  the  time.  This  is  a  clear  case  of  over- 
incentive. 

On  the  other  hand,  we  can  produce 
equally  mischievous  results  on  another  type 
of  man,  by  offering  too  high  a  reward.  In  his 
effort  to  attain  it  he  will  spend  himself  too 
freely,  using  all  his  reserve  strength,  and 
injuring  his  health.    This  is,  in  fact,  one  of 


264:      SCIENCE   AND    PRACTICE    OE    MANAGEMENT 

the  main  grounds  on  which  trade  unions  base 
their  objections  to  systems  of  payment  by 
results. 

It  is  worthy  of  remark  that  society  in  its 
gradations,  its  president  or  ruler,  its  legis- 
lators, judges,  great  preachers  or  ecclesias- 
tics, leaders  of  science  and  art,  captains  of 
industry,  etc.,  its  vast  mass  of  ordinary  men, 
and  its  sub-stratum  of  the  unfortunate  and 
the  incapable,  corresponds  very  closely  to  the 
distribution  of  faculty  as  revealed  by  the 
law  of  average  in  Faculty  above  mentioned. 
The  supply  of  capable  men  is  not  inexhaust- 
ible, the  supply  of  more  than  usually  compe- 
tent men  must  always  be  small.  We  have 
heard  of  late  a  university  professor  lament- 
ing the  incapacity  of  a  large  fraction  of 
students  to  profit  by  the  widespread  facili- 
ties for  higher  education  that  have-  been  so 
liberally  established  and  endowed  in  Amer- 
ica. His  opinion  is  that  young  men  are  be- 
ing attracted  out  of  their  proper  orbit,  that 
thousands  aspire  to  higher  positions  which 
they  are  naturally  incompetent  to  attain,  and 
they  make  the  time-honored  mistake  of  sup- 
posing that  education  will  turn  incapacity 
for  leadership  into  capacity  for  it. 

In  the  industrial  field,  there  are  also  many 


THE  THIRD   LAW   OF   EFFORT  265 

grades  from  the  president  at  the  top  to  the 
shop  sweeper  at  the  bottom  of  the  scale.  It 
is  the  just  boast  of  our  society  that  nothing 
prevents  the  sweeper  from  mounting  until 
he  fills  the  chair  of  the  president.  As  re- 
gards the  individual  this  is  satisfactory  and 
spectacular,  but  if  we  regard  either  society 
at  large  or  the  industrial  field  in  particular, 
we  shall  see  that  cases  of  this  kind  are  nu- 
merically very  few,  so  few  that  the  law  of 
average  is  not  thereby  disturbed  at  all.  We 
are  therefore  left  face-to-face  with  the  fact 
that  both  social  and  industrial  organization 
is  an  affair  of  gradations,  mobile  as  regards 
the  individual,  but  permanent  as  regards 
men  in  the  mass.  Though  men  are  actually 
passing  all  the  time  from  one  grade  to  an- 
other, both  upward  and  downward,  the  pro- 
portion in  each  grade  remains  constant. 

To  confine  our  attention  to  industrial  mat- 
ters, we  will  observe  how  this  permanent  sys- 
tem of  gradations  is  affected  by  Incentive, 
because  it  is  evident  that  a  right  understand- 
ing of  the  matter  is  very  important.  If  we 
suppose  that  any  man  can  be  spurred  by 
incentive  to  attain  any  end,  this  is  equiva- 
lent to  saying  that  whole  grades  of  men  can 
be  moved  upward  by  the  application  of  in- 


266     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

centive.  On  the  other  hand,  if  we  regard 
grades  of  faculty  as  permanent  phenomena 
of  society,  then  it  is  obvions  that  our  task 
must  be  to  adapt  and  proportion  the  incen- 
tive rather  to  the  grade  than  to  the  indi- 
vidual. 

In  practical  language  this  means  that  in 
fixing  the  incentive  for  any  particular  kind 
of  work,  we  must  regard  the  customary 
wages  for  that  trade,  calling,  or  profession. 
For  customary  wages  are  a  natural  growth 
or  evolution  and  have  been  worked  out  in- 
stinctively and  by  the  process  of  trial  and 
error  through  generations.  For  certain  work 
it  has  been  found  necessary  to  attract  cer- 
tain grades  of  faculty,  and  this  can  only  be 
done  by  paying  the  customary  wages*  or 
market  price  of  that  grade  of  faculty.  The 
more  difficult  the  work,  the  rarer  the  faculty 
that  will  handle  it,  and  consequently  the 
higher  the  market  price  for  that  grade  of  fac- 
ulty. "When  we  speak  of  "Incentive  being 
proportioned  to  Effort  expected",  therefore, 
we  really  mean  that  it  must  be  proportioned 
to  the  grade  of  faculty  concerned,  and  to 
the  customary  wages  for  that  grade  of  fac- 

*  For  a  discussion  of  customary  wages  in  the  general 
labor  problem,  see  Appendix  I. 


THE   THIRD   LAW   OF   EFFORT  267 

ulty.  If  we  offer  too  little,  the  right  grade 
of  faculty  will  not  respond;  if  we  offer  too 
much  we  are  not  only  wasting  money,  but 
making  individuals  dissatisfied  with  the  cus- 
tomary wages  of  their  grade  to  no  perma- 
nent purpose. 

In  applying  Incentive,  therefore,  our  aim 
must  be,  not  to  extract  higher-grade  activi- 
ties from  men  than  they  naturally  possess, 
but  to  promote  the  full  development  and  use 
of  those  faculties  they  may  be  reasonably  ex- 
pected to  possess.  If  this  seems  to  neglect 
the  interests  of  the  meritorious  individual, 
the  answer  must  be  that  the  meritorious  in- 
dividual is  usually  able  to  take  care  of  him- 
self. When  a  man  realizes  that  he  possesses 
faculties  superior  to  those  called  for  in  his 
work,  it  is  obvious  that  this  affects  the  mar- 
ket price  of  his  efforts,  but  not  the  market 
price  of  the  work  on  which  he  is  actually 
engaged.  One  of  the  most  difficult  practical 
problems  of  large  undertakings  arises  from 
just  this  position  of  affairs — the  grade  of 
faculty  of  many  men,  though  not  of  all,  rises 
as  they  get  older.  To  recognize  this,  and  to 
keep  such  men  by  finding  the  right  place  for 
them  as  they  develop,  is  no  easy  managerial 
task. 


268      SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

Having  thus  defined  the  aim  that  should  be 
observed  in  creating  Incentive,  we  may  now 
consider  the  forms  of  Incentive — moral  and 
material — with  a  view  to  ascertain  what  va- 
rieties of  these  can  be  applied  in  industrial 
practice. 

Moral  incentive  is  based  on  a  natural 
human  instinct,  that  of  emulation.  The  de- 
sire to  surpass  his  fellows,  to  shine  amongst 
them,  even  to  arouse  envy  in  them,  is  as  well 
marked  a  passion  in  human  nature  as  any 
other.  Badly  directed  it  leads  to  notoriety- 
seeking,  and  even  to  criminality ;  but  rightly 
directed  it  provides  a  good  deal  of  the  mo- 
tive power  of  civilized  society,  from  the  days 
of  childhood  onwards.  Moreover,  individual 
progress  is  very  often  clue  to  a  kind  of  self- 
emulation, — a  desire  to  mark  one's  own 
progress,  and  establish  new  records.  Many 
workers  engaged  on  monotonous  tasks  con- 
trive to  invest  them  with  interest  by  running, 
as  it  were,  races  with  themselves,  trying  out 
first  this  way  and  then  that,  and  keeping 
count  of  the  results  of  one  method  compared 
with  that  of  another.  From  which,  by  the 
way,  the  undesirability  of  despotic  insist- 
ence on  "one  best  way"  of  doing  routine 
work  may  be  deduced. 


THE   THIRD   LAW   OF   EFFORT  269 

The  use  of  emulation  as  a  form  of  Incen- 
tive, should,  however,  be  made  with  caution. 
"What  we  require  in  industry  is  not  sudden, 
spasmodic  effort,  based  on  straining  facul- 
ties, whether  mental  or  physical,  but  steady 
day-after-day  effort.  It  follows  therefore 
that  emulation  must  be  made  use  of  to  fo- 
ment interest  rather  than  to  force  the  pace. 
On  a  walking  tour,  a  great  deal  of  the  in- 
terest arises  from  the  sense  of  progress 
made,  of  ground  covered,  of  so  much  done. 
Walking  without  an  objective  point,  or  walk- 
ing in  a  country  without  landmarks,  with- 
out milestones,  so  that  the  progress  we  make 
cannot  be  measured,  loses  half  its  pleasure. 
Yet  it  does  not  follow  that  the  presence  of 
milestones  makes  us  walk  faster  or  unduly 
hurry  ourselves.  On  the  contrary,  our  prog- 
ress will  be,  more  even  and  sure,  our  pace 
steadier,  and  our  condition  of  fitness  better 
preserved,  if  we  are  able  to  mark  our  prog- 
ress at  frequent  intervals,  and  observe  what 
proportion  the  intensity  of  our  effort  bears 
to  the  attainment  of  our  goal. 

The  moral  varieties  of  Incentive  therefore 
should  be  so  arranged  that  they  give  rise  to 
emulation  of  an  invigorating  and  not  of  an 
exhausting  nature.     In  the  last  chapter  we 


270      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

sketched  a  proposal  for  promoting  esprit  de 
corps  in  the  power-plant  staff,  based  on  the 
simple  idea  of  publicity  of  certain  data  of 
interest  to  such  staff.  Such  a  form  of  pub- 
licity also  arouses  emulation,  the  desire  to 
maintain  good  records,  not  to  slip  back,  on 
the  contrary  to  make  a  little  progress  for- 
ward when  opportunity  offers.  It  is,  then, 
a  form  of  Incentive,  and  it  can,  moreover, 
be  converted  from  a  moral  to  a  material  in- 
centive by  the  equally  simple  step  of  attach- 
ing some  bonus,  or  small  increase  of  pay,  to 
the  maintenance  of  satisfactory  conditions 
and  to  the  improvement  of  the  record. 

It  must  be  noted  that  there  is  a  great  dif- 
ference both  in  aim  and  result  between  incen- 
tive applied  in  this  way,  and  the  ordinary  in- 
dividual piece-work  or  bonus  system.  The 
latter  has  its  place,  of  course,  and  is  not  ex- 
cluded by,  nor  does  it  exclude,  the  former. 
The  one  is  individual ;  the  other  is,  in  a  small 
way,  social.  Both  appeal  to  the  self-interest 
of  men,  but  in  a  wholly  different  way.  The 
one  appeals  to  self-interest  alone,  the  other 
appeals  to  group-pride.  The  one  has  but 
small  moral  invigoration  in  it,  the  other  has 
much.  The  one  concentrates,  the  other 
broadens  the  faculties — both  excellent  things 


THE  THIRD   LAW   OF   EFFORT  271 

in  their  way,  but  of  the  two  the  latter  has 
probably  the  most  lasting  and  satisfactory 
influence. 

At  the  beginning  of  this  chapter,  two  of 
the  questions  we  asked  were: — If  incentive 
is  of  two  kinds,  moral  and  material,  do  these 
forms  act  in  dissimilar  ways?  If  so  is  it 
possible  to  combine  them  to  act  on  the  indi- 
vidual? We  can  now  see  that  both  the 
answers  are  in  the  affirmative.  Moral  in- 
centive is  different  in  its  action  from  mate- 
rial incentive,  for  it  appeals  to  higher  in- 
stincts, and  it  can  be  combined  with  material 
incentive  so  that  both  act  in  the  same  direc- 
tion. 

The  mistake  must  not  be  made  of  confus- 
ing what  may  be  termed  ' i  collective  bonus ' ' 
with  the  form  of  incentive  above  mentioned. 
The  essential  feature  in  the  plan  proposed 
is  not  the  material  reward,  but  the  moral 
stimulus.  It  is  not  that  we  reward  a  group 
of  men  with  some  few  extra  dollars,  but  that 
we  let  a  group  of  men  know  when  and  how 
they  have  reached  certain  results.  The  few 
extra  dollars  give  additional  interest  to  the 
result,  much  as  some  people  cannot  play  a 
game  of  cards  without  having  something 
"on"  the  game.    But  the  average  man  does 


272     SCIENCE   AND    PRACTICE    OF   MANAGEMENT 

not  play  cards  for  what  he  makes  out  of  it ; 
he  plays  cards  for  interest  and  excitement, 
the  stake  being  only  incidental.  The  nearer 
we  study  the  everyday  actions  of  men  and 
the  motives  that  prompt  them,  the  nearer  Ave 
shall  be  to  devising  methods  of  industrial 
incentive  that  will  give  interest  to  life,  and 
thereby  invigorate  the  worker. 

The  aim  of  Incentive  should  be,  then,  both 
to  arouse  interest  in  a  broad  result,  and  to 
reward  individual  diligence  in  helping  to  at- 
tain that  result.  As  has  already  been  men- 
tioned, this  principle  has  been  adopted  by 
several  firms  in  promoting  efficiency  among 
their  selling  staff,  but  very  little  progress 
has  been  made  in  applying  it  to  the  factory. 
It  cannot  be  doubted,  however,  that  it  can  be 
and  should  be  applied  to  all  departments  of 
business,  if  only  because  it  arouses  group- 
consciousness  and  group-pride. 

The  practical  application  of  incentive  is 
obviously  a  matter  of  great  variety,  differ- 
ing in  each  industry  and  in  each  plant.  It 
is  not  our  desire  here  to  offer  concrete  sug- 
gestions or  fully  worked  out  plans,  but  to 
consider  the  underlying  principles  of  con- 
crete devices.  We  will  therefore  confine  our 
attention   to    formulating   in   practical   Ian- 


THE   THIRD   LAW   OF   EFFORT  273 

guage  some  of  the  conditions  that  should  be 
observed  in  setting  up  forms  of  incentive. 

First  we  have  the  natural  divisions  of  Ef- 
fort as  marked  out  by  the  existence  of  the 
Organic  Functions.  Thus  we  have  effort  ap- 
plied to  the  designing  function,  to  the  equip- 
ment, to  the  controlling,  the  comparison  and 
to  the  operation  functions.  It  is  only  in  very 
simple  businesses  that  we  may  expect  to  find 
it  possible  to  apply  any  form  of  incentive  to 
all  these  functions  collectively.  In  most 
cases,  separate  forms  of  incentive,  dealing 
with  separate  kinds  of  efficiency,  must  be  set 
up  for  the  work  of  each  function. 

Then  as  regards  the  work  of  any  one  func- 
tion, the  important  efficiencies  must  be  iso- 
lated (as  indicated  by  the  sub-principle  of 
the  Second  Law  of  Effort  that  "  Effort  must 
be  Bemunerated")  and  thereafter  analyzed 
and  considered,  as  in  the  case  of  the  power- 
plant  staff  already  referred  to,  so  as  to  dis- 
close the  data  on  which  incentive  should  be 
based.  If  for  example,  the  ratio  of  pounds 
of  fuel  burned  to  pound  of  steam  generated 
is  within  the  power  of  the  staff  to  control, 
then  this  item  of  efficiency  will  be  one  of  the 
bases.  If  the  keeping  up  of  a  certain  pres- 
sure at  all  times  is  similarly  dependent  on 


274     SCIENCE   AND    PKACTICE    OF    MANAGEMENT 

the  efficiency  of  service,  this  will  be  another 
base.  If  pressures,  temperatures,  vacua  or 
voltages  have  to  be  varied  from  time  to  time 
according  to  conditions,  then  the  closeness 
with  which  the  variations  are  kept  to  the 
change  in  conditions  will  be  another  base. 

Now  these  elements  can  be  made  the  basis 
of  individual  bonus,  in  some  cases — the  stok- 
ers, for  example,  can  be  rewarded  on  the 
separate  efficiency  of  their  work — and  a  gen- 
eral efficiency  factor  based  upon  the  various 
separate  efficiencies  can  be  made  the  base  of 
a  group-incentive.  In  the  latter  case  the  im- 
portant point  will  be  not  so  much  the  distri- 
bution of  a  certain  amount  of  money  as  a 
general  power-plant  efficiency  bonus,  but 
rather  the  publication  of  the  data  on  which 
such  bonus  is  based  in  such  form  that  all 
concerned  can  compare  results  from  one 
month  or  period  to  another. 

It  can  hardly  fail  to  be  noticed  that  we  are 
here  arranging  incentive  somewhat  on  the 
lines  both  of  analysis  and  synthesis.  We  re- 
ward the  ultimate  division  of  unit  operations, 
say  for  example,  the  stokers,  and  we  also 
synthesize  certain  kinds  of  effort,  which  are 
closely  related  to  each  other,  and  arrange 
another  kind  of  incentive  on  the  result  of 


THE   THIRD   LAW   OF   EFFORT  275 

this  synthesis.  By  so  doing  we  proportion 
incentive  not  only  to  individual  effort,  bnt 
to  group  effort  also.  We  comply  with  the 
principles  deduced  above,  viz. : — we  promote 
the  use  of  faculties  which  each  man  can  be 
reasonably  supposed  to  possess,  and  we  both 
arouse  interest  in  a  broad  result,  and  reward 
individual  diligence  in  attaining  that  result. 
As  a  by-product  of  this  arrangement  we  also 
promote  group-consciousness  and  therefore 
group-pride  or  esprit  de  corps  in  a  way  that 
no  form  of  incentive  applied  solely  to  the  in- 
dividual can  possibly  do. 

The  subject  of  incentive  as  applied  to 
operation,  that  is,  to  the  individual  operator, 
has  been  much  more  widely  discussed  than 
any  other.  The  modern  tendency  is  to  base 
it  on  a  careful  analysis  of  the  amount  of 
effort  required  for  each  job,  and  this  is  stud- 
ied by  means  of  time  study  and  motion  study. 
It  must  not  be  forgotten,  however,  that  time 
and  motion  study  are  methods  of  analysis  of 
effort,  and  not  measuring  rods  for  wages. 
This  has  been  vehemently  denied,  but  it  is 
obviously  so.  Wages  depend  on  custom — 
that  is,  on  the  experience  of  both  employer 
and  employee  over  a  series  of  years  as  to 
what  is  the  proper  price  to  pay  for  certain 


276     SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

grades  of  skill.  It  is  true  that,  in  some  cases, 
time  and  motion  study  have  revealed  that 
certain  work  can  be  done  by  a  lower  grade 
of  skill,  and  therefore  for  less  wages  than 
was  thought  possible.  This,  however,  is  a 
comparatively  unusual  discovery.  Wages 
are  commonly  fixed  by  custom,  and  analysis 
simply  defines  how  many  of  a  certain  thing 
can  be  handled  efficiently  in  the  course  of  a 
day's  work.  It  has  nothing  to  do  with  fix- 
ing the  customary  price  to  be  paid  for  that 
grade  of  work.  Much  of  the  hostility  of 
workmen  to  these  useful  methods  of  analysis 
is  due  to  a  misapprehension  of  this  fact,  for 
which  it  must  "be  confessed  the  wild  claims 
made  by  the  less  responsible  followers  of 
the  school  of  "scientific  management' '  are 
largely  responsible.  The  whole  subject  of  in- 
centive in  operation  has  been  discussed  in 
Appendix  I  under  the  title  of  "The  Labor 
Question''. 

There  is  one  form  of  Incentive  that  may 
possibly  assume  more  importance  in  the  fu- 
ture than  it  has  in  the  past,  namely,  the  so- 
called  profit-sharing.  But  while  it  satisfies 
one"  of  the  conditions  laid  down  here,  in  that 
it  tends  to  interest  the  employees  in  a  broad 
result,  it  appears  to  lack  somewhat  of  the 


THE   THIED   LAW   OF   EFFOET  277 

other  half  of  the  same  condition,  namely  the 
rewarding  of  individual  diligence  in  helping 
to  attain  that 'result.  In  other  words  the 
defect  of  the  plan  appears  to  be  that  the  re- 
ward is  too  remote.  Nevertheless,  in  so  far 
as  it  brings  into  focus  the  idea  that  all  in- 
dustry is  in  effect  a  partnership,  it  must  be 
commended  if  only  as  an  antidote  to  the  per- 
nicious theory  of  socialistic  or  anarchistic 
agitators,  that  labor  is  the  source  of  all 
wealth. 

In  a  broad  and  academic  sense  this  is,  of 
course,  true.  Matter  being  inert,  it  is  evi- 
dent that  it  does  not  build  itself  into  forms 
of  wrealth.  But  neither  is  it  built  into  forms 
of  wealth  by  labor  alone,  either  by  manual 
or  mental  labor.  Both  these  have  to  be  or- 
ganized and  synthesized  before  they  can  ef- 
fect any  more  efficient  conversion  into  wealth 
than  is  found  in  the  wigwam  of  the  primi- 
tive savage.  All  the  rest  depends,  first  on 
a  conception  of  an  objective,  and  the  means 
to  realize  this  objective.  Second,  on  the  or- 
ganization of  mental  and  manual  labor  into 
effective  functional  activities  to  attain  these 
ends — one  of  these  functional  activities  in 
industry  at  large  being  the  manipulation  of 
the  secreted  or  stored  energy  of  the  com- 


278     SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

munity,  known  as  Finance.  Now  it  is  just 
this  power  of  conception  and  this  power  of 
synthesis  and  organization  that  are  some- 
what rare  in  the  world,  and  like  all  rare 
things,  have  their  market  price,  which  is 
high.  Labor  in  the  ordinary  sense  has  no 
part  in  these  creative  activities,  but  is  only 
taken  into  partnership  at  a  later  stage.  It  is, 
of  course,  "worthy  of  its  hire"  and  everyone 
wishes  that  its  rate  of  hire  should  be  as  high 
as  reasonably  possible;  but  it  is  not  the 
only  factor  of  wealth,  nor  even  the  most  im- 
portant one. 

The  proof  of  the  proposition  that  labor  is 
not  the  most  important  factor  in  creating 
wealth  is  in  the  lamentable  fact  that  it  is 
frequently  a  drug  in  the  market,  and  cannot 
find  any  outlet  for  its  powers.  "Why  is  this? 
It  is  that  the  supply  of  labor  has,  for  the 
time  outrun  the  capacity  of  the  organizing 
element  to  create  new  openings.  It  is  a  com- 
mon phenomenon  to  find  great  unemploy- 
ment of  labor  and  at  the  same  time  great  un- 
employment of  capital.  Yet  anyone  who  sees 
a  way  of  using  either  to  good  advantage  can 
usually  find  an  opportunity  of  doing  so.  If 
there  are  times  when  it  is  not  done,  it  is  be- 
cause it  cannot  be  done.     The  world  is  at 


THE  THIED   LAW   OF   EFFORT  279 

that  moment  awaiting  some  constructive  con- 
cept to  set  things  in  motion.  Shrewd  men, 
searching  the  world  for  opportunity,  natur- 
ally expect  to  be  paid  wrell  for  their  efforts, 
and  for  their  capacity,  when  they  succeed. 
While  profit-sharing  is  a  valuable  idea  as 
far  as  it  helps  labor  to  realize  the  true  nature 
of  the  problems  of  industry,  it  does  not  seem 
at  present  to  have  attained  a  development 
of  great  promise.  It  is  possible,  however, 
that  it  contains  a  valuable  germ,  and  will  at- 
tain greater  usefulness  in  the  future. 

TABLE    XIII.       APPLICATION"    OF    THE    THIED    LAW    OF 
EFFORT 

Personal  Effectiveness  Must  Be  Promoted 

First  sub-principle : — 

Good  physical   conditions  and  environment  must 
be  maintained. 
Second  sub-principle : — 

The  vocation,  task,  or  duty  should  be  analyzed  to 
determine  the   special   human   faculty   concerned. 
Third  sub-principle: — 

Tests  should  be  applied  to  determine  in  what  de- 
gree candidates  possess  special  faculty. 
Fourth  sub-principle : — 

Habit   should  be  formed  on   standardized   bases, 
old  or  new. 
Fifth  sub-principle: — 

Esprit  de  corps  must  be  fostered. 
Sixth  sub-principle: — 

Incentive  must  be  proportioned  to  effort  expected. 


Chaptek  XII 

THE    MANAGER   AND    THE    INSTRUMENTS 
OF  MANAGEMENT 

'T^HE  whole  subject  of  the  Organic  Func- 
tions  of  manufacturing  industry  and 
the  Laws  of  Effort  that  control  them  has  now 
been  developed.  In  the  present  chapter  it  is 
proposed  to  review  the  matter  generally,  and 
supplement  it  by  some  observations  on  the 
relations  of  the  manager  to  the  science  of 
management. 

It  has  been  shown  that  production  is  a  syn- 
thesis of  certain  well-marked  functions. 
Each  one  of  these  functions  is  essential  to 
production  in  some  measure,  though  their 
relative  importance  varies  in  different  indus- 
tries. In  some  the  function  of  Design  is  very 
elementary,  in  others  Equipment  is  less  com- 
plex than  in  others.  Again  there  are  in- 
dustries easily  yielding  to  Control,  and  oth- 
ers in  which  a  considerable  proportion  of  the 
total  number  employed  is  engaged  in  one  va- 
riety or  other  of  the  controlling  function. 
The  same  applies  to  the  function  of  Compari- 

280 


THE  INSTRUMENTS    OF   MANAGEMENT  281 

son.  Operation  alone  has  an  equal  impor- 
tance in  all  industries,  because  like  the  fight- 
ing force  of  an  army,  it  is  the  function  to 
which  all  the  other  functions  minister.  But 
of  course,  it  does  not  always  reach  the  same 
complexity,  either  in  variety  of  different 
kinds  of  skill  concerned,  or  in  the  difficulty 
of  performing  the  acts  of  operation. 

No  other  activity  of  production  exists  out- 
side these  five  Organic  Functions.  If  any  ex- 
ists it  is  optional,  such  as  certain  kinds  of 
welfare  work,  which  are  however  really  ad- 
ministrative acts  touching,  or  supposed  to  be 
touching,  on  the  promotion  of  personal  effi- 
ciency. If  they  are  functioned  at  all,  they 
are  derivatives  or  branches  of  the  function 
of  Control. 

Efficiency  in  production  is  dependent,  and 
alone  dependent,  on  successful  synthesis  of 
functional  activity.  As  regards  each  func- 
tion the  Laws  of  Effort  point  out  what  has 
to  be  done,  but  these  laws  do  not  apply  them- 
selves— they  are  applied.  What  then  applies 
them,  and  what  so  consolidates  the  working 
of  the  Organic  Functions  that  efficiency  is 
realized?  There  is  only  one  answer  to  this 
question,  namely — the  synthetic  influence  of 
a    strong    personality.      Both    the    Organic 


282      SCIENCE   AND    PRACTICE    OE    MANAGEMENT 

Functions  and  the  Laws  of  Effort  deal  with 
relationships  between  living  beings, — these 
are  the  only  material  with  which  the  science 
of  management  has  to  deal.  It  is  the  associ- 
ation of  men  for  various  objects  that  alone 
gives  rise  to  industry,  and  it  is  the  success- 
ful synthesis  of  their  efforts  that  gives  rise 
to  efficient  industry. 

In  all  history  there  are  but  few  examples 
of  armies  that  have  done  great  things  with- 
out two  elements  being  present:  first,  great 
leadership;  secondly,  great  discipline — that 
is,  the  capacity  of  men  for  following  leader- 
ship. On  the  other  hand  there  have  been  in- 
numerable instances  where  a  change  of  lead- 
ers has  transformed  an  unsuccessful  into  a 
triumphant  army,  and  also  cases  where  the 
reverse  has  taken  place.  Above  all,  there- 
fore, what  is  necessary  to  efficiency,  is  lead- 
ership. 

Management  is  the  science  of  applied 
human  effort,  just  as  chemistry  is  the  science 
of  applied  chemical  properties  of  elements 
and  their  compounds.  In  either  case,  above 
and  outside  the  natural  reactions  wmich  it  is 
the  role  of  the  science  to  study,  a  controlling 
human  agent  is  tacitly  implied.  If  manage- 
ment implies  a  manager,  chemistry  implies  a 


THE   INSTRUMENTS    OF   MANAGEMENT  283 

chemist.  Each  of  these  men  sets  out  to  pro- 
duce result  by  manipulating  the  material  at 
his  command,  subject  to  the  laws  of  his 
science,  and  whatever  he  attains  he  attains 
by  skilful  synthesis.  But  both  the  manager 
and  the  chemist  act  on  and  through  the 
science,  outside  which  they  themselves  stand. 
In  either  case  the  man  brings  to  his  aid  a 
synthetic  action  which  is  purely  individual 
and  uses  the  facts  and  laws  of  science  to 
produce  a  result  that  must  first  exist  in  his 
own  brain. 

This  seems  to  show  that  the  manager,  the 
leader,  must  bring  something  into  the  solu- 
tion of  his  problem  beyond  the  science  with 
which  he  works.  It  is  not  sufficient  for  a  man 
to  understand  chemical,  or  military,  or  man- 
agement science  to  make  him  a  great  and 
successful  worker  in  these  fields.  There  is 
evidently  something  more  needed,  something 
subtle,  something  which  it  is  not  possible  to 
define  with  precision,  but  which  is  summed 
up  in  the  very  vague  but  well  understood 
word  "capacity''.  Probably  one  of  the  great 
components  of  capacity  is  a  strong  and  un- 
usual sense  of  proportion,  a  quantitative 
sense  which  tells  him  not  only  which  way  to 
go,  but  how  far  to  go. 


284:     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

We  come  here  to  a  paradox,  namely  that 
the  science  of  management  cannot  produce 
managers.  But  neither  can  military  science 
produce  generals.  In  both  cases  study  of  the 
science  can  assist,  can  help  them  to  sys- 
tematize their  work,  does  put  them  in  pos- 
session of  the  accumulated  experience  of  the 
past  as  regards  the  success  or  non-success 
of  principles  that  have  been  tried  out  long 
ago;  but  the  great  leader  is  after  all  born 
and  not  made. 

We  come  back  therefore  to  a  picture  of  a 
man  of  capacity  using  two  great  instruments 
— synthesis  and  analysis — to  attain  the  ends 
that  seem  fit  to  him.  In  the  foregoing  chap- 
ters we  have  tried  to  depict  something  of  the 
nature  of  the  material  with  which  he  must 
work — the  functional  activity  of  his  men ; 
and  further,  certain  observed  influences  or, 
laws  that  control  this  activity  have  been  dis- 
cussed. These  are  the  warp  and  weft  of  the 
fabric  he  has  to  create,  but  the  fabric  itself 
will  be  a  result  of  the  way  in  which  he  com- 
bines these  elements.  His  work  is  to  adapt 
these  general  truths  to  particular  circum- 
stances, just  as  the  general  of  an  army  has  to 
adapt  the  rules  of  military  science  to  the 
changing  necessities  of  a  campaign. 


THE   INSTRUMENTS    OF   MANAGEMENT  285 

In  the  foregoing  chapters  we  have  exhib- 
ited the  skeleton  and  framework  of  the 
science  of  management  in  manufacturing. 
We  have  defined  the  scope  of  the  five  Organic 
Functions,  and  have  shown  the  wholly  dis- 
similar nature  of  their  aims  and  objects,  and 
the  impossibility  of  supposing  that  these 
aims  are  in  any  way  interchangeable.  We 
cannot  conceive  that  an  act  of  Design  can 
ever  give  rise  to  material  product,  or  that 
an  act  of  Operation  (that  is,  the  exercise  of 
a  machine  process  or  a  trade  or  skill)  can 
ever  produce  a  new  design.  Similarly  the 
mechanism  and  organization  of  Control  and 
of  Comparison  have  obviously  such  different 
aims  that  we  cannot  conceive  an  act  of  Con- 
trol ever  comparing  anything,  or  vice-versa. 
Equipment  also,  being  the  function  which 
provides  physical  conditions,  is  evidently  an 
inert  or  passive  function.  It  represents  a 
plant  in  full  working  order,  it  is  true,  but 
not  necessarily  working.  The  vast  reach  and 
influence  of  Equipment  is  best  realized  by 
walking  through  a  large  plant  when  it  is  de- 
serted by  the  living  factors  of  production, 
and  Equipment, — dead,  inert  Equipment,  is 
in  sole  possession  of  the  field.  At  such  a 
moment  one  does  not  need  to  be  reminded 


286     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

that  Equipment  is  indeed  a  thing  apart,  and 
that,  by  itself,  it  is  incapable  of  producing 
product,  or  of  exercising  the  functions  of 
Control,  Comparison  or  Design. 

Across  these  functional  activities,  the  syn- 
thesis of  which  alone  makes  a  plant  in  ac- 
tive operation,  we  have  seen  certain  Laws 
of  Effort  weaving  a  fabric  of  custom  and 
habit.  For  it  must  be  understood  that  these 
Laws  of  Effort, — like  all  other  natural 
"laws" — are  merely  the  recorded  results  of 
phenomena  which  have  been  so  often  ob- 
served to  happen  in  the  same  way  that  we 
are  justified  to  consider  them  indefinitely  re- 
peatable  under  similar  circumstances.  When 
we  say  that  to  produce  fine  results,  * '  Experi- 
ence must  be  systematically  accumulated, 
standardized  and  applied",  we  are  merely 
recording  a  particular  industrial  problem,  in 
a  particular  way  and  applied  to  what  is  the 
universal  observation  of  mankind.  There 
can  be  no  doubt  about  either  the  universality 
or  the  correctness  of  such  a  law,  and  what 
we  have  said  about  it  that  is  in  any  way 
novel  is  to  point  out  that  it  must  be  applied 
in  manufacturing,  not  at  large  or  vaguely, 
but  in  five  different  directions.  We  must  ac- 
cumulate, standardize  and  apply  experience 


THE  INSTRUMENTS   OF   MANAGEMENT  287 

in  Design,  Equipment,  Control,  Comparison, 
and  Operation.  This  alone  gives  definite- 
ness  to  the  law. 

Similarly,  the  second  Law  of  Effort,  that 
Effort  must  be  regulated  in  four  ways,  viz. : 
— by  Dividing,  Co-ordinating,  Conserving 
and  Kemunerating  it,  is  no  new  discovery. 
Expressed  in  less  definite  and  technical 
phraseology  it  has  been  known  from  the  be- 
ginning. But  here  again  we  may  claim  to 
have  given  some  definiteness  to  this  uni- 
versal law,  by  pointing  out  that  each  of  the 
five  functional  activities  concerned  in  pro- 
duction are  subject  to  this  law,  and  that  nat- 
urally it  produces  different  effects  in  each. 
This  law,  like  the  others,  has  not  been  in- 
vented, but  observed — it  has  always  existed. 

Finally,  we  come  to  the  Third  Law  of 
Effort,  which  speaks  of  the  conditions  nec- 
essary for  the  promotion  of  personal  effect- 
iveness in  the  work  of  production.  Here 
again  we  have  nothing  but  well-worn  truths, 
assembled  and  grouped  so  that  their  appli- 
cation to  the  particular  problem  of  manu- 
facturing management  may  be  studied  at 
leisure.  But  this  law  does  not  apply  to  Func- 
tional activity  as  such.  It  deals  with  each 
individual  as  an  individual.     The  first  sub- 


288     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

principle,  indeed,  is  modified  in  application 
according  to  whom  it  is  applied,  since  "good 
physical  conditions"  for  one  kind  of  work 
are  not  the  same  as  those  demanded  for  an- 
other. But  they  have  no  connection  with 
the  functions  as  such.  Take  for  example, 
the  question  of  quiet  surroundings.  The 
higher  officers  in  each  function  have  need  of 
much  quieter  surroundings'than  the  rank  and 
file.  The  accountant  has  one  standard  of 
quiet,  but  the  weighman  at  the  cupola,  even 
though  engaged  on  the  same  -functional  ac- 
tivity, viz.,  record  and  comparison,  need  not 
be  safeguarded  in  the  same  degree.  The 
draftsman,  again,  must  have  a  high  degree 
of  quiet,  but  the  time-study  man  frequently 
carries  on  his  operations  in  the  shop  itself 
with  perfect  comfort  and  success.  Hence 
the  application  of  even  this  first  sub-prin- 
ciple cannot  be  regarded  as  divisible  by  func- 
tions. 

The  remaining  sub-principles  of  the  third 
Law  have  even  less  specialized  application. 
They  deal  with  four  very  important  but  quite 
abstract  ideas — vocational  fitness,  habit, 
esprit  de  corps,  and  incentive.  Some  day,  no 
doubt,  all  these  matters  will  have  been 
studied  in  so  much  detail  that  their  specific 


THE   INSTRUMENTS  OF    MANAGEMENT  289 

application  to  functions  may  seem  feasible 
and  necessary.  But  as  yet  this  is  not  the 
case,  and  these  matters  have  to  be  dealt  with 
in  the  abstract. 

On  the  subject  of  vocational  fitness  and  the 
tests  to  be  applied  in  order  to  discover  it, 
we  have  thought  it  necessary  to  call  atten- 
tion to  the  warning  of  Professor  Muenster- 
berg  with  regard  to  the  use  of  psychological 
methods  of  analyzing  faculty.  Already  a 
good  deal  of  quackery  has  developed  in  this 
direction,  and  methods  not  far  removed  from 
the  old  and  exploded  phrenological  absurdity 
of  determining  character  by  "  feeling  the 
bumps' '  have  been  put  forward  for  serious 
acceptance.  The  determining  of  vocational 
fitness  is  of  course  no  new  thing.  Every 
employer  uses  it  to  a  greater  or  less  degree 
when  he  engages  an  office  boy  on  the  strength 
of  his  handwriting,  his  testimonials,  and  the 
personal  impression  he  makes.  The  newer 
ideas  in  this  direction  simply  seek  to  dis- 
cover, first  better  and  more  exact  grounds 
for  determining  vocational  fitness  of  a  sim- 
ple order,  and  secondly  for  determining  fit- 
ness, of  a  complex  order  such  as  the  work 
of  a  motorman  spoken  of  in  Chapter  IX  (see 
page  228). 


290     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

The  formation  of  correct  industrial  habit 
has  been  dealt  with  as  the  fourth  sub-prin- 
ciple of  the  Third  Law  of  Effort.  Here 
again  we  have  not  dealt  with  a  catalogue  of 
habits  desirable  or  undesirable  in  regard  to 
Functional  activities.  It  is  the  general  prin- 
ciple that  habit  should  be  formed  on  stand- 
ardized bases  that  has  been  laid  down.  It 
has  been  shown  that  these  need  not  be  new 
bases.  Thus  the  habit  of  punctuality  is  cer- 
tainly a  conformity  to  standard,  but  the 
standard  is  very  old.  "Where,  however,  an- 
alysis has  shown  old  standards  of  perform- 
ance to  be  faulty,  then  new  standards  when 
determined  should  be  passed  into  habit  as 
soon  as  possible.  Thus  if  motion  study  ap- 
plied to  a  particular  kind  of  work  demon- 
strates that  the  old  habitual  way  of  doing 
it  was  wrong,  it  is  eminently  desirable  that 
the  new  method  should  be  established  as  a 
tradition,  that  is,  as  a  habit,  as  soon  as  pos- 
sible. Every  habit  customary  today  began 
at  some  time  or  other,  and  most  have  been 
subject  to  modification  many  times  in  their 
history.  But  each  alteration,  each  improve- 
ment, has  resulted  in  new  habit  being 
formed,  and  though  "written  instructions" 
are  sometimes  a  necessary  stage  in  the  pro- 


THE   INSTRUMENTS   OF   MANAGEMENT  291 

cess  of  forming  new  industrial  habit,  they 
should  be  regarded  as  an  unavoidable  nui- 
sance, and  not  carried  too  far,  or  too  long. 
Of  course,  in  one  sense,  every  technical  text- 
book is  an  example  of  written  instructions, 
but  no  practical  man  is  always  running  to 
a  text  book  for  guidance  in  his  daily  work. 
He  gathers  from  such  books  the  practice  he 
desires  to  adopt,  and  this  practice  then  be- 
comes part  of  his  practical  habit. 

Considerable  space  has  been  devoted  to 
an  examination  of  the  fifth  sub-principle  that 
"esprit  de  corps  should  be  fostered",  be- 
cause the  wide  attention  that  has  been  given 
to  analytical  methods  in  recent  years  has 
almost  submerged  the  synthetical  demands 
of  management.  Much  more  attention  has 
been  given  to  considering  the  problem  of 
production  microscopically,  than  to  consid- 
ering it  as  a  whole.  Though  it  is  true  that 
a  whole  is  made  up  of  parts,  as  a  house  is 
of  bricks,  there  is  more  in  management  than 
the  fitting  together  of  microscopic  details, 
just  as  there  is  more  in  architecture  than 
the  placing  one  brick  on  another  in  a  neat 
and  workmanlike  manner. 

Among  the  synthetical  processes  that  have 
been    somewhat    neglected    lately,    this    of 


292     SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

esprit  de  corps  may  be  noticed.  True,  a 
great  deal  has  been  heard  about  the  desir- 
ability of  a  spirit  of  co-operation — although 
as  we  have  pointed  out,  esprit  de  corps 
means  much  more  than  mere  co-operation — 
hut  even  a  spirit  of  co-operation  does  not 
arise  from  a  combination  of  mechanisms ;  it- 
arises  from  the  perception  of  larger  issues 
than  are  contained  in  any  mechanism.  Men 
do  not  co-operate  merely  because  it  is  a  good 
thing  to  do  in  the  abstract;  they  co-operate 
because  co-operation  comes  naturally  to 
them. 

Now  the  real  motive  force  is  rarely  or 
never  due  to  the  matter  having  been  rea- 
soned out  by  the  individuals  concerned. 
Men  rarely  or  never  get  together  and  say, 
"let  us  co-operate ".  On  the  contrary,  the 
act  of  co-operation  is  really  a  polarization 
of  wills  due  to  some  outside  influence,  just 
as  a  host  of  little  magnets  all  turn  in  one  di- 
rection when  enveloped  by  a  magnetic  field, 
and  this  outside  influence  is  still  more  rarely 
self-interest.  Where  true  co-operation  ex- 
ists it  is  usually  unconscious,  and  due  to  the 
fact  that  a  high  development  of  esprit  de 
corps  exists.  And  as  we  have  shown,  esprit 
de  corps  is  a  complex  and  subtle  atmosphere, 


THE   INSTRUMENTS    OF   MANAGEMENT  293 

largely    emanating    from    personality  —  the 
personality  of  those  in  control. 

The  last  of  the  sub-principles  of  the  Third 
Law  of  Effort  that  "incentive  must  be  pro- 
portioned to  effort  expected"  is  also  of  a 
general  and  abstract  character.  It  is  an  ex- 
amination into  the  nature  and  elements  of 
incentive  that  we  have  made,  rather  than  a 
prescription  of  definite  methods  of  setting 
up  efficiency  rewards.  It  was  found  that 
different  and  well  recognized  gradations  of 
skill  are  present  in  the  industrial  field,  and 
that  each  of  these  has  its  customary  wage. 
The  object  of  incentive  was  found  to  be,  not 
an  attempt  to  raise  men  of  one  grade  to  an- 
other and  higher  grade,  for  that  is  their  per- 
sonal affair,;  but  to  call  out  the  full  use  of  the 
faculties  that  may  be  reasonably  expected  to 
be  possessed  in  any  given  grade.  In  the 
course  of  doing  this,  emulation  may  be 
aroused,  but  on  condition  that  it  is  used  to 
arouse  interest  in  the  work  rather  than  to 
force  the  pace.  There  is  in  fact,  in  all  ques- 
tions of  incentive,  a  group  aspect  as  well  as 
an  individual  aspect,  and  the  best  form  of 
incentive  will  be  that  which  combines  both 
of  these.  Here,  again,  the  tendency  of  late 
years  has  perhaps  been  to  concentrate  at- 


294     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

tention  on  spurring  the  individual,  to  the 
neglect  of  the  equally  important  task  of  fos- 
tering esprit  de  corps  by  arousing  interest  in 
the  group. 

We  are  now  at  the  end  of  our  task,  which 
was  to  exhibit  and  delimit  the  five  Organic 
Functions  of  manufacturing  management 
and  demonstrate  how  the  three  Laws  of  Ef- 
fort influence  their  working.  In  a  work  of 
this  kind,  containing  so  many  details,  it  is 
possible  that  errors  have  been  made,  and 
even  that  some  small  inconsistencies  may  be 
discovered.  But  it  is  believed  that  the  broad 
outlines  are  correctly  presented,  and  that  we 
are  here  in  presence  of  some  few  funda- 
mental facts  and  Laws,  which  can  be 
reasoned  about,  and  practically  applied. 
They  may  be  considered,  therefore,  the  com- 
mencement of  a  formal  science  of  manage- 
ment. 

In  the  chapters  that  follow,  a  brief  glance 
will  be  given  at  the  task  of  the  practical  or- 
ganization of  the  five  Organic  Functions. 
Machine  manufacturing  has  been  selected  as 
a  case  in  point  chiefly  because  it  is  more  com- 
plex than  most  other  forms  of  industry,  and 
manufacturers   of  other  classes  of  product 


THE  INSTRUMENTS    OF   MANAGEMENT  295 

will  have  to  ignore  much  that  does  not  apply 
to  their  industry,  leaving  intact  what  does 
so  apply.  To  assist  the  latter  class  of 
reader,  however,  a  diagram  has  been  pre- 
pared, showing  application  of  the  five  func- 
tions to  a  more  simple  form  of  industry  than 
machine  manufacture. 


PAET  II 
OEGANIZING  THE  OEGANIC  FUNCTIONS 

In  order  to  illustrate  the  practical  organi- 
zation of  the  Organic  Functions,  machine 
manufacture  is  taken  as  an  example,  because 
it  represents  what  is  probably  the  most  com- 
plex kind  of  industry.  In  order  to  correlate 
the  particulars  thus  given  to  other  indus- 
tries, all  that  does  not  apply  should  be 
omitted.  Thus  the  function  of  Design  in 
some  industries  is  quite  rudimentary,  being 
represented  by  the  writing  of  a  chemical 
formula,  Similarly  in  some  industries  the 
function  of  Control  is  quite  a  simple  mat- 
ter, in  others  it  demands  an  elaborate  or- 
ganization. Generally  speaking  the  follow- 
ing chapters  refer  to  what  may  be  consid- 
ered as  a  maximum  development  in  each 
function. 


297 


Chapter  XIII 
ORGANIZING   THE   FUNCTION   OF   DESIGN 

THE  first  stage  in  establishing  a  plant  is  to 
decide  on  the  product  to  be  manufac- 
tured. Its  design  for  technical  use  should 
then  be  undertaken.  The  preparation  of  de- 
signs for  use  does  not  come  within  the  scope 
of  this  book,  which  deals  exclusively  with  pro- 
duction. In  fact  it  does  not  follow  that  such 
design  is  prepared  by  the  manufacturer  at 
all.  Not  infrequently  complete  designs  of  the 
machine  are  supplied  by  the  inventor  or 
other  person  putting  the  product  on  the  mar- 
ket. It  must  be  assumed  that  whoever  is  re- 
sponsible has  applied  the  First  Law  of  Ef- 
fort and  that  he  has  availed  himself  of  all 
the  experience  obtainable  with  regard  to  the 
technical  and  commercial  value  of  his  de- 
sign. 

We  do  not  need  to  consider,  therefore,  the  efficiency 
of  the  machine  as  a  whole,  or  what  may  be  termed 
its  technical  efficiency.  This  belongs  to  the  problem 
of  the  ultimate  use  and  value  of  the  product,  with 
which  we,  as  considering  the  manufacturing  prob- 
299 


300      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

lem  purely,  are  not  concerned.  Whether  the  ship 
we  are  building  will  prove  a  dividend  earner  for 
her  owner,  whether  the  shoes  we  are  manufacturing 
will  prove  acceptable  to  the  demands  of  fashion, 
or  whether  the  machines  we  are  building  will  do 
what  they  are  alleged  to  do,  are  interesting  points, 
very  important  to  continued  commercial  success, 
but  they  are  not  manufacturing  problems. 

In  all  such  cases  we  must  assume  that  the  product 
is  a  well  thought  out  product,  as  far  as  its  uses 
go.  It  is  only  after  that  question  has  been  settled 
that  manufacture  can  be  safely  undertaken,  because 
by  manufacture  we  mean  making  in  quantity. 
Therefore  it  is  well  to  point  out  that  Design  has  two 
sharply  defined  sides — design  for  technical  excellence 
of  use,  and  subsequent  scrutiny  and  possible  modifi- 
cation of  such  design  with  a  view  to  manufacture. 

Having  decided  on  the  product  and  hav- 
ing accepted  its  general  design  for  use,  the 
series  of  operations  which  are  embraced  in 
the  term  production  may  be  said  to  com- 
mence.   These  begin  with : — 

1.  Organization  of  a  drafting-room  force 
capable  of  undertaking  design  for  manufac- 
ture, i.  e.,  modifying  the  design  of  parts  or 
components  so  as  to  bring  them  into  a  form 
suitable  for  the  most  economical  manufac- 
ture. 

2.  Analysis  of  the  machine  or  product  into 
components  or  parts  suitable  for  manufac- 
ture, by  means  of : — 


THE    FUNCTION    OF   DESIGN  301 

3.  Division  of  Effort.  Having  divided 
the  product  into  units  of  simplest  form  and 
construction,  the  machine  processes,  skills, 
and  trades  which  are  the  units  of  Opera- 
tion must  be  mentally  applied  to  each  piece. 
If  necessary  the  design  of  components  must 
be  varied  to  enable  these  units  of  operation 
to  be  applied  successfully  and  directly.  Suc- 
cessful design  for  manufacture  depends  on 
units  of  design  corresponding  exactly  with 
units  of  operation. 

4.  Co-ordination  of  Effort.  Having  set 
up  units  of  Design  they  must  be  carefully 
scrutinized  to  see  that  they  will  ultimately 
meet  together  exactly  without  "gap  or  over- 
lap". In  mechanical  work  this  means  care- 
ful attention  to  "fits,  limits  and  tolerances". 
In  some  industries  it  implies  correct  speci- 
fication of  ' '  allowances  or  margins '  \ 


Want  of  co-ordination  is  a  very  expensive  kind  of 
inaccuracy.  Having  once  divided  effort,  it  becomes 
necessary  to  foresee  how  the  separate  products  of 
such  divided  effort  come  together  again,  to  form  a 
whole. 

In  practice  a  "fit"  may  be  all  the  way  from  an 
affair  which  requires  the  parts  to  be  hacked,  filed, 
anathemized  and  forced  into  place,  to  a  simple 
bringing  together  of  two  components,  and  a  slight 
tap  with  a  mallet. 


.302     SCIENCE   AND   PRACTICE    OF   MANAGEMENT 

A  great  deal  of  money  is  lost  by  lack  of  clear 
thinking  beforehand  as  to  the  co-ordination  of  parts, 
otherwise  of  "fits." 

The  nature  of  the  fit — that  is,  the  accuracy  of 
dimension  to  be  imparted  to  the  component — is, 
from  the  point  of  view  of  efficient  manufacturing, 
nearly  as  important  as  the  shape  of  the  part.  Either 
unnecessary  accuracy  or  not  enough  runs  woefully 
away  with  profits. 

It  will  be  evident  that  this  is  a  source  of  confu- 
sion and  loss  that  lies  with  the  designer  to  obviate, 
and  with  no  one  else.  The  use  of  standard  tables 
of  clearances  and  tolerances  will  materially  assist; 
but  a  lively  sense  of  the  loss  that  will  be  sustained 
by  want  of  precision  in  indicating  just  what  is 
necessary,  and  no  more,  will  be  still  more  useful. 
This  can  be  brought  about  only  by  bringing  such 
losses  as  they  occur  to  the  culprit's  attention,  and 
so  forming  a  good  tradition  in  the  drafting  room, 
namely,  that  the  question  of  fits  is,  economically 
speaking,  one  of  the  most  important  questions  that 
the  draftsman  has  to  solve. 

5.  Conservation  op  Effort.  Units  of  de- 
sign (that  is,  of  product)  must  be  capable  of 
being  made  by  the  simplest  operative  skill. 
This  implies,  very  often,  the  additional  de- 
sign of  accessories,  jigs,  tools,  etc.,  so  that 
simple  skill  can  be  applied  with  automatic 
precision.  Standardization,  or  the  principle 
of  "fewest  things",  also  arises  from  the 
necessity  to  conserve  effort  in  regard  to  de- 
sign.    Parts,    tools,    and   small   accessories 


THE    FUNCTION"    OF   DESIGN  303 

should  not  be  multiplied  unnecessarily.  Un- 
necessary accuracy  or  unnecessary  finish 
should  be  eliminated  by  specification  of  the 
correct  degree  of  finish  to  be  given  to  the 
part. 

Assuming  that  we  have  scrutinized  our  design,  so 
that  we  are  certain  that  there  is  no  avoidable  dupli- 
cation of  components  or  of  elements,  and  that  every 
item  is  in  its  ultimate  simplest  form,  we  wish  to 
take  means  to  preserve  that  simplicity  in  the  future, 
and  to  prevent  useless  and  harmful  complexity  creep- 
ing in,  as  it  is  sure  to  do  unless  we  take  energetic 
means  to  keep  it  out. 

These  means  will  vary  in  form  according  to  the 
size  and  nature  of  the  plant.  Where  the  product  is 
very  simple,  its  components  are  few,  and  changes 
are  made  at  infrequent  intervals,  very  little  more 
than  a  reasonable  alertness,  a  good  memory,  and  ac- 
curate observation  on  the  part  of  the  designer  will 
serve  to  keep  things  from  growing  in  complexity. 
But  few  plants  are  in  this  Arcadian  condition.  For 
the  most  part  we  shall  have  to  rely  on  carefully 
made  records,  and  not  on  anyone's  memory,  and 
these  records  when  made  will  have  several  uses  to 
be  dealt  with  later. 

Such  records  will  take  the  form  of  a  catalogue  of 
components  or  parts  of  jigs  and  tools  associated  with 
them,  and  of  auxiliary  tools,  such  as  drills,  boring 
bars,  taps,  reamers,  cutters,  and  so  forth.  A  clear 
statement  of  the  range  and  capacity  of  each  ma- 
chine should  also  be  made. 

It  will  be  the  duty  of  the  designer  to  prevent 
accessions  to  this  catalogue  except  when  it  is  un- 
avoidable. 


304     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

It  is  no  great  task  for  each  designer  to  familiar- 
ize himself  with  this  "Book  of  the  Plant".  It  should 
be  his  vade  mecum  and  be  with  his  thoughts  at  all 
times,  both  asleep  and  awake.  If  he  trains  himself 
to  think  in  terms  of  it,  a  very  large  portion  of  the 
worries,  complications,  confusions,  and  errors  that 
occur  daily  in  every  plant  would  be  obviated. 

There  is  a  difference  between  rigidity  of  organi- 
zation and  definiteness  of  plan.  This  "Book  of  the 
Plant"  is  a  case  of  the  latter  and  not  of  the  former. 
It  prevents  nothing,  it  insists  on  nothing,  it  stands 
in  the  way  of  nothing — the  moment  that  it  ceases 
to  be  up-to-date.  We  look  on  its  extension  with  cold 
favor  and  a  wary  eye,  but  when  it  is  necessary,  it  is 
the  simplest  thing  in  the  world  to  do  it.  It  is  no 
obstructionist  "system"  that  cannot  be  modified  in- 
stantly necessity  calls. 

This  is  a  case  of  applying  experience  to  form 
standards.  Our  experience,  in  a  new  plant,  begins 
with  the  determining  of  certain  necessary  elements. 
We  record  these  elements  as  a  coherent,  related  body 
of  facts,  once  for  all.  As  we  gather  more  experience 
we  add  to  the  record.  Later  we  may  decide  to  elimi- 
nate part  of  our  recorded  experience  from  current 
practice,  but  our  "Book  of  the  Plant"  always  repre- 
sents the  conditions  of  the  day — conditions  that  by 
this  means  have  been  kept  at  the  zero-point  of  avoid- 
able complexity. 

In  connection  with  the  components  of  the  product 
the  question  of  naming  or  indicating  them  is  sure 
to  crop  up.  The  modern  tendency  seems  to  be 
towards  an  alarming  complexity  of  symbolization. 
Mixtures  of  letters  and  figures  ten  units  long  are 
not  uncommon,  and  certain  types  of  mind  seem  to 
glory  in  them.  If'  it  is  a  question  of  using  long 
combinations,    then    there    is    little    doubt   that   an 


THE   FUNCTION    OF   DESIGN"  305 

abbreviated  name  is  better.  Many  persons  of  quite 
good  mental  equipment  cannot  remember  figures, 
and  consequently  run  great  risk  of  setting  them  down 
incorrectly.  The  ordinary  workman  is  usually  less 
liable  to  err  with  names  than  with  figures.  As  busi- 
nesses of  considerable  complexity,  with  very  ad- 
vanced methods,  have  not  found  it  desirable  to  re- 
place names  by  symbols,  it  would  seem  that  it  is  to 
be  avoided  wherever  possible. 

Symbolizing  is  sometimes  supposed  to  aid  in  sys- 
tematic arrangement  of  stores,  but  as  arrangement 
of  stores  is  a  physical  affair,  it  is  difficult  to  see  why 
it  cannot  be  arranged  by  names  just  as  easily.  Of 
course  a  certain  amount  of  symbolizing  is  almost 
obvious,  such  as  describing  the  different  shops  by 
letters  or  numbers,  machines  or  processes  by  code 
letters,  such  as  P  for  planing,  etc.;  but  this  is  a 
different  thing  from  such  examples  as  "Lq34967- 
XPG,"  which  is  the  fashionable  variety  of  the  art. 
Such  shorthand  may  be  very  compact,  but  it  is  dan- 
gerous, tends  to  tie  things  up  in  "system",  and  its 
only  excuse  must  be  a  very  clear  advantage,  which 
so  far  is  not  clearly  proven. 

Nevertheless,  whatever  symbols  are  adopted, 
should  be  made  common  knowledge,  and  incorpo- 
rated in  the  "Book  of  the  Plant"  so  that  there  is  no 
ambiguity  in  their  use. 

6.  Matekial.  Design  specifies  the  nature 
and  sometimes  the  properties  of  material  to 
be  nsed.  It  may  specify  the  chemical  com- 
position and  certain  physical  properties, 
snch  as  hardness,  elasticity,  etc.  It  will  be 
observed  that  is  quite  apart  from  the  speci- 
fications of  design  already  mentioned,  all  of 


306     SCIENCE   AND    PEACTICE    OF    MANAGEMENT 

which  deal  with  changes  to  be  wrought  on 
the  status  of  material  by  the  processes  of 
operation. 

Material  and  the  work  performed  on  it  make  np 
the  whole  story  of  production,  for  it  mnst  not  be 
overlooked  that  all  the  functions  (and  these  latter 
embrace  every  kind  of  mental  and  manual  work  in 
the  plant)  exist  only  for  the  purpose  of  making 
changes  in  the  status  of  material  in  accordance  with 
the  behests  of  Design.  Some  of  these  activities,  as 
the  power-plant  or  the  cost  office,  contribute  only  in- 
directly to  the  result^  but  they  exist  only  for  the 
sake  of  that  result. 

7.  Specification  of  Details  of  Opekation. 
The  above  proceedings,  if  properly  carried 
out,  have  given  rise  to  a  design  of  a  unit  of 
product  complete  in  all  respects  as  to  its 
physical  and  chemical  composition  (if  our 
work  is  so  particular  as  to  require  this  refine- 
ment) but  in  any  case  complete  as  regards 
the  physical  shape  of  the  part  itself,  with 
all  its  dimensions  prescribed,  and  sometimes 
with  a  list  of  particular  tools  and  accessories 
which  should  be  used  in  the  various  proc- 
esses to  be  employed  in  its  manufacture.  We 
have  now  to  complete  this  design  by  further 
specifications  which  relate  not  to  its  physical 
appearance  but  to  the  details  of  the  way  it 
should  be  manufactured. 


THE    FUNCTION"    OF   DESIGN  307 

It  will  be  remembered  that  it  was  laid  down  as  a 
guiding  principle  that  the  work  of  the  designer  of 
components  should  be  intimately  connected  with  an 
exhaustive  knowledge  of  operation  units  and  the 
way  that  they  can  be  applied  to  perform  work. 
Hence  it  follows  that  in  a  properly  designed  com- 
ponent there  will  be  a  way  of  making  it  more  natural 
than  any  other,  namely,  that  method  which  was 
present  to  the  mind  of  the  designer  when  he  was 
working  out  the  design.  Under  such  circumstances, 
to  specify  the  method  of  manufacture  is  as  natural 
as  to  specify  dimensions,  or  accessory  tools.  But  as 
this  information  applies  only  to  the  one  individual 
piece,  it  is  evidently  merely  a  completion  of  the 
full  act  of  design  of  that  piece. 

8.  Okganization  of  a  Pkoduction'-Depakt- 
ment  force  as  part  of  the  general  function  of 
Design,  capable  of  analyzing  design  units 
into  details  of  operation,  and  of  making  time, 
and  if  desired,  motion  study  of  such  details, 
with  a  view  to  complete  the  whole  chain  of 
specifications  relating  to  the  production  of 
each  component. 

As  will  be  referred  to  in  more  detail  under  the 
heading  of  "organizing  the  function  of  operation,"  a 
good  deal  of  the  time  study  necessary  (where  it  is 
necessary)  on  individual  components  in  the  ma- 
chine industry  arises  from  the  fact,  firstly,  that  ma- 
chine tools  have  a  very  wide  range  of  duty  compared 
with  most  industrial  machines,  and  secondly,  that 
very  little  systematic  experience  has  been  accumu- 
lated about  their  performances.     Consequently  there 


308     SCIENCE   AND    PEACTICE    OF    MANAGEMENT 

are  few  recognized  standards  of  a  general  nature 
available.  This  involves  separate  study  of  operation 
detail  for  each  component  for  which  it  is  desired  to 
specify  time  allowances  accurately. 

Applying  the  Second  Law  of  Effort  to  the  Opera- 
tion Units  on  each  component  is  the  work  of  such  a 
department.  It  first  analyzes  the  operation  into  two 
groups,  viz., — steps  necessary  to  prepare  the  material 
and  the  machine,  and  steps  necessary  to  apply  the 
machine  process,  trade,  or  skill  to  the  work. 

9.  Division  of  Effort.  Each  step  in  prep- 
aration and  in  operation  is  considered  sep- 
arately, and  a  time  stndy  made  of  it. 

10.  Co-ordination  of  Effoet.  The  various 
steps  are  scrutinized  for  "gap  and  overlap". 
Each  step  should  carry  the  work  a  definite 
stage  forward,  so  that  the  whole  process  is 
a  series  of  independent  steps  in  natural  se- 
quence. 

11.  Conservation  of  Effort.  This  in- 
volves a  study  of  method.  Alternative  meth- 
ods of  handling  work  may  exist;  conse- 
quently when  the  importance  of  the  job  de- 
mands it,  a  further  analysis  is  made,  namely, 
of  movements.  This  is  commonly  known  as 
motion  study. 

After  such  an  analysis  has  been  made  the  shortest 
possible  way  of  handling  the  work  should  be  known, 
or,  in  other  words,  the  way  to  do  the  job  with  the 


THE   FUNCTION"    OF   DESIGN"  309 

least  expenditure  of  effort  is  disclosed.  When  neces- 
sary this  information  is  incorporated  with  the  speci- 
fications of  Design,  and  becomes  part  of  the  work- 
ing instructions  for  production  of  that  part  or 
component. 

12.  At  this  point  the  whole  production  his- 
tory of  the  component  has  been  embodied  in 
instructions,  which  may  be  regarded  as 
Standards  for  the  production  of  that  piece. 
These  will  hold  good  until  modified  by  experi- 
ence in  some  particular.  Thus,  the  chain  of 
Design  begins  with  the  initial  analysis  of 
the  machine  or  other  product  into  compo- 
nents or  parts.  It  ends  when  all  that  can  be 
specified  in  advance  about  each  component 
has  been  so  specified. 

It  should  be  noted  that  the  specifications  of  form, 
dimension  and  material  are  much  more  rigid  than 
those  of  the  detail  of  operation  to  be  applied.  The 
former  must  be  observed  exactly,  since  to  depart 
from  them  would  be  to  produce  something  else  than 
what  was  intended.  The  latter,  however,  are  merely 
indicative  of  what  has  been  considered  to  be  the 
best  way  of  carrying  out  processes  to  comply  with 
the  rigid  specification  of  form  and  dimension.  But, 
if  the  exigencies  of  the  shop  demand,  this  specifica- 
tion of  detail  of  operation  may  be  departed  from 
without  endangering  the  production  of  the  right 
kind  of  component.  There  will  probably  be  a  loss 
of  another  kind,  namely,  waste  of  effort.  If  the 
shortest  and  best  way  has  been   specified,   then  to 


310     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

make  the  conrponent  by  another  way  means  a  loss 
of  efficiency  as  regards  the  best  nse  of  labor  and 
machinery.  But  in  some  cases  this  may  not  matter, 
the  loss  may  be  counterbalanced  by  gain  in  another 
direction,  as  in  "rushing"  a  job  through,  or  making 
use  of  an  idle  machine  whose  use  was  not  contem- 
plated in  the  specification. 

13.  We  have  now  to  consider  the  Func- 
tion of  Design  as  a  whole.  We  have  ob- 
served each  step  in  its  work;  now  we  have 
to  consider  it  as  a  function — that  is,  as  a 
synthesis  of  individuals  engaged  on  a  com- 
mon effort.  At  the  outset  we  saw  that  ap- 
plication of  the  First  Law  of  Effort  was 
implied  in  acceptance  of  the  initial  designs. 
Now  we  have  to  note  the  application  of  that 
Law  to  the  current  work  of  the  function. 
We  began  with  certain  accumulated  experi- 
ence, which  formed  our  standards  of  de- 
parture, but  it  is  also  necessary  to  keep  these 
standards  up  to  date.  To  do  this  we  must 
continually  accumulate  new  experience, 
standardize  it,  and  apply  it,  as  the  First  Law 
of  Effort  dictates. 

This  demands  a  little  organization.  The 
work  of  the  function  of  Design  is  very  vari- 
ous, and  also  very  important.  There  are 
many  kinds  of  standards  involved,  and  each 
of  these  requires  watching  and  when  neces- 


THE   FUNCTION    OF    DESIGN"  311 

sary  rectifying  in  accordance  with  experi- 
ence. Without  attempting  to  enumerate  all 
of  them,  we  may  call  attention  to  some  of 
the  more  salient. 

The  object  of  the  function  being  design 
for  manufacture,  it  will  be  obvious  that  many 
problems  will  come  up  which  will  be  more  or 
less  similar  to  problems  already  attacked 
and  settled.  Parts  of  similar  shape,  or  hav- 
ing some  similar  peculiarity,  when  once  they 
have  been  satisfactorily  designed,  form  prec- 
edents, or  as  we  may  call  them,  standards, 
for  all  similar  work.  Therefore  one  of  the 
wants  of  the  Function  will  be  a  method  of 
indexing  and  cross-indexing  drawings  and 
working  instructions  so  that  similar  jobs 
may  be  quickly  gathered  for  comparison  and 
study. 

This  may  sometimes  give  rise  to  a  revision  of  the 
older  methods  of  doing  work.  In  studying  over 
former  jobs  in  the  light  of  a  new  problem,  new  and 
better  methods  of  doing  work  may  be  discovered. 
In  such  cases  some  method  of  noting  a  reference 
on  the  old  specifications  should  be  provided,  so  that 
when  the  work  comes  up  for  production  again,  the 
standard  may  be  improved. 

14.  The  same  remarks  apply  to  specifica- 
tion of  details  of  operation,  perhaps  to  an 
even   greater    extent.     A    good    system    of 


312     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

classifying  processes  should  give  rise  to  a 
very  complete  mastery  over  the  details  of 
the  sphere  of  action  of  every  machine  in  the 
plant.  In  particular,  preparation  time 
should  be  studied  in  this  way,  so  that  an  av- 
erage of  all  common  jobs  for  a  given  machine 
can  be  fixed.  This,  in  its  way,  forms  a 
standard  preparation  time  for  each  machine, 
and  jobs  which  exceed  this  standard  average 
are  evidently  weak  as  regards  holding  fix- 
tures or  other  details. 

It  has  been  pointed  out  elsewhere  that  most  of 
the  detailed  study  of  operation  necessary  in  machine- 
shop  work  arises  from  the  fact  that  machine-tools 
are  much  more  universal  in  their  range  than  most 
others.  In  many  industries,  a  machine  will  do  only 
one  thing  and  will  do  it  in  only  one  way.  In 
other  cases  a  change  of  work  involves  merely  a  sim- 
ple alteration  of  the  machine  or  the  addition  of  some 
accessory,  thus  reducing  "preparation  time"  to  an 
almost  or  quite  negligible  quantity.  But  in  machine- 
tool  operations,  the  limits  within  which  a  machine 
acts,  and  the  variety  of  work  it  will  do,  are  not  only 
large  but  indefinite.  Hence  the  necessity  for  care- 
ful study  of  the  individual  job  in  all  machine-tool 
operation. 

15.  Attention  has  already  been  drawn  to 
the  necessity  for  standardizing  the  product 
itself;  that  is,  cataloguing  the  various  parts 
which  are  common  to  different  sizes,  so  that 


THE    FUNCTION    OF   DESIGN  313 

unnecessary  design  is  prevented.  Similarly 
tools  used  for  dimensioning,  such  as  drills, 
taps,  reamers,  cutters,  etc.,  should  be  cata- 
logued, and  a  rule  established  that  no  di- 
mension shall  be  specified,  except  under  un- 
avoidable circumstances,  that  requires  spe- 
cial tools  not  thus  registered  in  the  "book  of 
the  plant".  The  same  remarks  apply  to 
common  small  parts,  such  as  levers,  hand- 
wheels,  nuts  and  bolts,  and  so  forth.  All 
these  should  be  catalogued  and  not  departed 
from  in  specification  unless  some  imperative 
reason  exists. 

The  object  of  this  is,  of  course,  to  conserve  effort. 
Though  it  may  not  take  longer  to  sketch  an  odd  size 
of  some  accessory  than  it  would  take  to  look  up  the 
standard  size  in  the  "Book  of  the  Plant,"  it  must 
not  be  forgotten  that  Design  is  the  function  that 
originates  activity  in  the  other  functions.  Conse- 
quently acts  of  design  that  are  unnecessary  lead  to  a 
whole  chain  of  consequences  that  mean  unnecessary 
effort  and  therefore  unnecessary  expense.  To  make 
a  thing  instead  of  taking  it  out  of  stock  means 
that  drawings,  perhaps  time  studies,  specifications  of 
material,  purchasing,  receiving,  storing  and  hand- 
ling materials,  issue  of  orders,  job-cards  and  instruc- 
tions, occupation  of  time  of  machines,  attention  of 
foremen,  inspection,  records  of  material,  labor  and 
expense— are  all  set  in  motion  to  save  a  few-minutes 
time  of  a  draftsman.  The  importance  of  limiting  the 
act  of  design  to  necessary  things  is  therefore  fairly 
obvious. 


314     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

These  are  some  of  the  more  important  directions 
in  which  the  function  of  Design  makes  use  of 
standards.  In  providing  mechanism  for  making 
these  standards  available  for  constant  reference  and 
study  we  are  applying  practically  the  First  Law  of 
Effort.  We  are  accumulating  experience,  using  it  to 
rectify  standards,  and  thus  applying  them  to  our 
current  and  future  work. 

16.  The  Remuneration  of  Effort.  It  has 
usually  been  found  difficult  to  apply  the  prin- 
ciple of  special  reward  to  the  function  of 
Design,  since  efficiency  depends  here  far 
more  on  quality  than  on  quantity.  Creative 
work  is  subject  to  no  law,  and  cannot  be  con- 
strained or  forced  into  grooves.  In  strictly 
routine  work  premiums  for  the  avoidance  of 
errors  may  be  adopted.  Rewards  can  also  be 
offered  for  improvements  leading  to  better 
technical  efficiency  of  product,  or  to  greater 
ease  and  economy  in  manufacture;  usually 
however  the  scale  of  remuneration  is  calcu- 
lated so  as  to  take  care  of  such  events.  Few 
examples  of  special  reward  in  regard  to  the 
Function  of  Design  are  on  record. 

17.  Application  of  the  Third  Law  of  Ef- 
fort. As  was  explained  in  Chapter  XII,  the 
law  that  "personal  effectiveness  must  be 
promoted "  deals  with  individuals  as  such, 
and  not  with  their  functional  activities.    We 


THE    FUNCTION    OF   DESIGN  315 

cannot  therefore  enter  into  a  discussion  of 
its  application  to  any  of  the  functions,  since 
it  does  not  apply  uniformly  throughout. 
Very  considerable  analysis  would  be  neces- 
sary to  show  how,  for  example,  "physical 
conditions  and  environment "  should  be  set 
up.  These  would  require  not  one  but  sev- 
eral standards,  each  relating  to  a  small  group 
of  men.  In  the  matter  of  quiet,  the  working 
out  of  a  new  design  requires  different  con- 
ditions from  the  motion  study  of  the  work  on 
that  design.    And  so  throughout. 

Conclusion 

We  have  now  covered  very  briefly  and  cur- 
sorily the  organization  of  the  function  of  De- 
sign. Design  sets  in  motion  the  most  impor- 
tant activities  of  the  plant.  The  more  definite- 
ly we  realize  this,  the  greater  will  be  our  ap- 
preciation that  this  is  the  function  of  all 
others  in  which  the  exercise  of  forethought 
is  desirable,  so  that  nothing  shall  be  done, 
and  no  activity  be  set  in  motion,  that  is  not 
economically  necessary.  If  we  neglect  to  pre- 
scribe, with  the  requisite  precision,  such  a 
matter  as  the  co-ordination  of  parts  or  com- 
ponents— that  is,   of  limits,  fits,  and  toler- 


316      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

ances — we  leave  the  door  open  to  subsequent 
waste  of  effort.  And  this  waste  is  sure  to 
occur.  In  like  manner,  unless  we  lay  our- 
selves out  to  accumulate  experience  sys- 
tematically, so  as  to  form  standards  of  prac- 
tice, we  shall  fail  to  advance  as  much  as  we 
might ;  while  if  we  do  so,  we  shall  generally 
be  a  little  wiser  today  than  we  were  yester- 
day as  regards  the  proper  method  of  design- 
ing our  product. 


TABLE    XIV.      PRINCIPAL    APPLICATIONS    OF    ANALYSIS 
IN  REGARD  TO  DESIGN. 

1.  Analysis  of  the  machine  or  other  product  into 

unit  parts  or  components. 

2.  Analysis  of  each  part  into  process  units  cor- 

responding with  operation  units  (e.  g.}  plan- 
ing, drilling,  etc. ) . 

3.  Analysis  of  each  process  unit  into  two  varieties 

of  work,  namely,  preparation  or  setting,  and 
operation. 

4.  Analysis   of   each   of   these   varieties   into   its 

elements,  namely,  the  several  steps  necessary 
to  do  the  work. 

5.  Time  study  of  each  of  these   separate   steps. 

The  aggregate  of  time  required  for  all  the 
steps  of  preparation  becomes  a  standard 
time.  Similarly  with  time  required  for  ail 
the  steps  of  operation. 


THE    FUNCTION    OF    DESIGN  317 

6.  Motion   study   of   preparation    and   operation 

steps  may  be  desirable,  when  the  frequent 
repetition  of  the  same  work  makes  it  re- 
munerative. 

7.  In    connection   with    (2)    above,    it    may   be 

found  necessary  to  specify  the  use  of  cer- 
tain tools,  jigs,  etc.  These  may,  in  some 
cases,  require  designing  and  constructing. 
Then  their  use  requires  analysis  and  study 
in  the  same  manner  as  components. 

Note. — Analysis  of  the  method  of  operating  machines, 
apart  from  individual  items  of  product,  is  a  part  of  Opera- 
tion,  q.  v. 


Chapter  XIV 

ORGANIZING    THE    FUNCTION    OF    EQUIP- 
MENT 

T)  EFOKE  we  can  undertake  production  we 
■*~*  must  have  equipment.  On  the  other 
hand,  we  cannot  proceed  to  the  installation 
of  equipment  before  we  know  what  our  prod- 
uct is  to  be,  nor  can  we  do  so  satisfactorily 
until  we  have  settled  the  volume  of  product 
that  we  expect  to  handle.  Logically,  there- 
fore, in  establishing  a  new  plant,  detailed  de- 
signs for  manufacture  should  have  been 
worked  out,  estimates  should  have  been  pre- 
pared showing  the  quantity  of  material  that 
it  will  be  necessary  to  hold  in  stock,  the 
amount  of  work  in  process  that  will  be  en- 
tailed, and  the  quantity  of  finished  parts  and 
of  completed  product  that  it  is  considered 
desirable  to  hold.  Having  obtained  a  quan- 
titative idea  of  all  these  factors  we  shall  be 
in  a  position  to  consider  the  variety  and  ca- 
pacity of  the  equipment  necessary  for  the 
particular  problem  and  case  with  which  we 
are  concerned. 

318 


THE    FUNCTION   OF   EQUIPMENT  319 

I.  The  Installation  of  Equipment 

1.  Application  of  the  Fiest  Law  of  Ef- 
fokt.  In  all  branches  of  equipment  progress 
is  more  or  less  continuous.  This  applies  not 
merely  to  operation  equipment,  but  also  to 
buildings  and  their  accessory  equipment  of 
lighting,  heating,  ventilation  and  sanitation: 
to  the  plant  for  generating  and  transmit- 
ting power;  to  facilities  for  handling  and 
storing  product,  and  transporting  it  to  and 
fro,  and  so  forth.  On  all  these  points,  there- 
fore, we  need  to  ascertain  the  latest  practice, 
or  in  other  words,  the  best  standards,  and 
apply  this  experience  in  selecting  our  equip- 
ment. 

No  one  would  willingly  contemplate  commencing 
with  equipment  that  is  inferior,  since  to  do  so  would 
entail  a  serious  handicap.  Yet  in  comparatively 
few  cases  is  experience  systematically  sought  and 
applied  on  all  the  points  embraced  in  the  function. 
Not  infrequently  attention  is  focussed  on  getting 
the  most  modern  and  standard  operative  equipment, 
leaving  the  other  matters  to  be  settled  haphazard. 
Many  important  matters  are  overlooked,  particularly 
the  fact  that  a  plant,  from  the  point  of  view  of  its 
equipment,  is,  or  should  be,  a  well-balanced  whole. 
Equipment  of  all  kinds  requires  proportioning,  and 
its  balanced  arrangement  or  lay-out  has  a  stronger 
bearing  on  efficiency  than  is  commonly  recognized. 
Errors  made  at  this  stage  will  affect  adversely  the 
fortunes  of  the  plant  through  many  years.     Hence 


320     SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

the  importance  of  accumulating  systematically, 
standardizing,  and  applying  the  best  experience  we 
can  obtain  at  this  initial  stage. 

2.  Application  of  Second  Law — Division 
of  Effort.  The  chief  elements  of  the  prob- 
lem are:  (1),  land  and  the  buildings  to  be 
erected  on  it;  (2),  the  equipment  of  such 
buildings  with  the  necessary  lighting,  heat- 
ing, ventilation  and  sanitation  appliances; 
(3),  the  power  plant  and  methods  of  trans- 
mitting power;  (4),  storage,  handling  and 
conveying  or  transporting  materials;  (5), 
operative  machinery;  (6),  offices.  In  regard 
to  each  of  these  the  different  kinds  of  equip- 
ment service  must  be  analyzed  and  appor- 
tionment made  accordingly. 

Thus,  the  first  matter  to  be  considered  is  the 
apportionment  of  space:  the  area  to  be  devoted  to 
each  class  of  equipment,  the  size  of  buildings  and 
gangways  and  yard  space,  the  space  required  by  the 
power  plant,  by  stores,  by  shops  and  offices,  etc. 
With  a  given  site,  the  areas  to  be  devoted  to  special 
purposes  must  be  carefully  worked  out.  The  analy- 
sis thus  made  will  give  us  a  general  idea  of  the  sug- 
gested scheme  of  apportionment  which  must  then  be 
scrutinized  in  accordance  with  the  next  two  sub-prin- 
ciples of  the  second  Law  of  Effort. 

3.  Further  Application  of  Second  Law — 
Co-ordination    of    Effort.      The    different 


THE   FUNCTION"   OF   EQUIPMENT  321 

parts  of  equipment  must  form  a  working 
whole.  Each  of  them  exists  not  for  itself, 
but  for  realization  of  a  common  aim,  namely, 
— manufacture.  The  capacity  of  the  various 
kinds  must  therefore  be  balanced;  power 
service  and  storage  facilities  must  be  pro- 
portioned to  the  demands  of  the  volume  of 
work  expected  to  be  handled  by  the  opera- 
tion function.  Each  equipment  service  must 
therefore  be  considered  quantitatively  so 
that  the  work  of  the  whole  may  be  co-ordi- 
nated. There  must  be  no  gap  or  overlap, 
i.e.,  no  department  of  equipment  should  have 
a  smaller  capacity  than  will  be  called  for, 
and  similarly  it  would  be  wasteful  to  have 
it  of  a  larger  capacity  than  required.  An- 
alysis of  the  capacity  of  equipment  of  all 
classes  must  be  made,  to  ascertain  the  due 
proportion  of  each. 

4.  Application  of  Second  Law  (contin- 
ued)— Consekvation  of  Effokt.  .  Equipment 
must  be  arranged  so  that  product,  persons 
and  communications  follow  the  path  of  least 
effort.  This  sub-principle  points  out  there- 
fore the  necessity  of  considering  lay-out. 
Two  kinds  of  analysis  are  desirable  at  this 
point.  First  we  must  trace  the  path  of  prod- 
uct, persons,    and  communications   between 


322     SCIENCE   AND   PRACTICE   OE   MANAGEMENT 

buildings,  so  that  the  arrangement  of  these 
latter  in  the  given  space  may  be  the  most 
efficient.  Secondly,  a  like  path  mnst  be  traced 
ivithin  the  various  buildings,  so  that  ma- 
chines, desks,  transport  appliances  and  so 
forth  may  be  arranged  with  the  least  loss  of 
effort  ensuing  when  work  is  in  full  swing. 
The  result  of  this  analysis  will  probably 
modify  our  first  suggested  scheme,  and  may 
overpower  considerations  based  on  peculiari- 
ties of  site  which  at  first  seemed  important. 

The  application  of  these  three  sub-principles 
should  bring  our  proposed  arrangements  to  a  per- 
fect form.  First,  we  analyze  the  different  kinds  of 
equipment  service  we  require,  and  make  a  rough  ap- 
portionment of  space  accordingly.  Next  we  consider 
each  equipment  service  quantitatively,  and  ascertain 
exactly  what  amount  of  space  should  be  devoted  to 
each.  This  ensures  the  balancing  of  our  equipment 
in  its  various  capacities,  without  gap  or  overlap. 
Lastly  we  consider  the  path  of  least  effort,  and  thus 
arrive  at  the  precise  physical  arrangement  of  our 
equipment.  By  making  these  three  analyses,  we 
arrive  at  (1)  the  kind,  (2)  the  relative  quantity,  and 
(3)  the  relative  position  of  the  equipment. 

5.  The  Eemaining  Laws  of  Effort.  These 
hardly  apply  to  the  installation  of  equip- 
ment, which  is  commonly  purchased,  and  fre- 
quently erected  by  contract.  We  do  not 
therefore  need  to  consider  either  special  as- 


THE    FUNCTION"   OF   EQUIPMENT  323 

pects  of  its  remuneration,  or  the  promotion 
of  personal  efficiency  in  those  that  erect  it. 

II.    Administrative  Oeganization  of  Equip- 
ment 

Equipment  provides  the  conditions  of 
manufacture.  If  it  is  of  inferior  quality,  or 
badly  arranged,  bad  conditions  will  be  set 
up  which  will  be  very  difficult  to  overcome. 
But  the  upkeep  of  standard  conditions  is  also 
important.  Equipment  itself  being  an  inert 
thing  requires  to  be  organized  into  service, 
such  service  being  that  of  maintaining  stand- 
ard conditions. 

Thus,  if  we  have  installed  a  poor,  inefficient,  in- 
adequate power  plant,  good  power  conditions  cannot 
be  hoped  for.  But  even  if  a  first-class  plant  has 
been  installed,  it  ma)r  not  be  administered  efficiently, 
and  thus  conditions  in  that  respect  may  be  just  as 
poor  as  if  an  inferior  plant  had  been  installed.  The 
administrative  side  of  the  Function  of  Equipment  is 
therefore  concerned  with  maintaining  the  most  favor- 
able conditions  possible  for  manufacture.  To  do 
this  the  Laws  of  Effort  must  be  observed. 

6.  Application  of  the  Fikst  Law  of  Ef- 
fort. Experience  as  to  what  are  standard 
conditions  applicable  to  the  equipment  we 
employ  should  be  systematically  sought  and 
applied.    In  regard  to  some  departments  of 


324      SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

equipment,  standards  are  fairly  well  known. 
Power  supply,  for  example,  can  be  stand- 
ardized in  great  detail,  and  any  departure 
from  standard  working  observed  at  once. 
Other  equipment  standards  are  those  of 
heating,  standardized  by  the  thermometer; 
of  maintenance,  standardized  by  freedom 
from  breakdown;  of  cleanliness,  standard- 
ized by  very  simple  inspection;  of  trans- 
porting and  conveying  service,  standardized 
by  absence  of  delays  due  to  work  being  held 
up  between  transport  points. 

Few  plants  have  begun  to  look  at  equipment  ser- 
vices as  capable  of  standardization  in  this  way.  But 
as  the  proper  working  of  equipment  and  the  services 
it  performs  are  really  controlling  conditions  in  most 
instances,  the  importance  of  doing  so  cannot  be 
doubted.  It  is  the  more  important  because  most  of 
the  inefficiencies  of  equipment  are  insidious  and  un- 
perceived,  unless  we  look  specially  for  them  and  keep 
a  standard  of  performance  in  view.  They  do  not 
bring  production  to  a  stop,  but  they  slacken  its  pace. 
They  do  not  affect  direct  cost  of  jobs,  but  only  affect 
burden  and  cause  waste  of  capacity  to  produce. 
Therefore,  the  inefficiencies  of  equipment  are  not 
spectacular,  but  only  very  injurious. 

7.  Application  of  the  Second  Law — Divi- 
sion of  Effoet.  Division  of  Effort  in  regard 
to  administration  of  equipment  has  relation 
to  the  organization  of  the  various  equipment 


THE   FUNCTION"   OF    EQUIPMENT  325 

services  in  units  of  simplest  skill,  special 
men  being  assigned  as  far  as  possible  to 
special  duties,  either  individually  or-  in  sub- 
groups, as  care  of  belts  and  transmission 
appliances,  of  motors,  of  the  different  sec- 
tions of  power  service — lighting,  heating, 
ventilation,  etc.  All  the  various  services  ex- 
pected of  equipment  should  be  analyzed,  so 
as  to  show  the  different  classes  of  effort  nec- 
essary, such  as  firemen  and  stokers,  en- 
gineers, painters,  carpenters,  electricians, 
repair  mechanics,  cranemen,  elevator  and 
conveyor  operators,  etc. 

8.  Application  or  the  Second  Law  (con- 
tinued)— Coordination  of  Effort.  The  dif- 
ferent classes  of  effort  required  in  the  func- 
tion of  Equipment  having  been  determined 
by  careful  analysis,  the  problem  must  be 
studied  quantitatively.  How  many  men  of 
each  class  will  be  required,  from  the  works 
engineer  and  his  assistants  down  to  the  shop 
sweepers  1  Duties  will  be  so  allotted  that  the 
due  proportion  of  each  equipment  service 
can  be  steadily  maintained  without  gap  or 
overlap.  No  service  should  be  neglected,  or 
its  care  left  to  chance.  Everything,  even 
periodical    and    occasional    jobs,    should,  be 


326      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

definitely  included  in  the  scheme,  so  that 
every  effort  that  goes  to  maintain  condi- 
tions may  be  co-ordinated. 

9.  Application  of  the  Second  Law  (con- 
tinued)— Consekvation  of  Effokt.  Equip- 
ment services  should  be  so  planned  that  they 
are  continuous  and  not  spasmodic.  The 
golden  rules  of  equipment  service  should  be 
(1)  that  prevention  is  better  than  cure,  (2) 
that  a  stitch  in  time  saves  nine.  The  effort 
concerned  in  maintaining  conditions  can  be 
most  readily  conserved  by  not  letting  things 
happen. 

The  money  value  of  even,  unvaried,  uniform 
equipment  service  is  enormous,  although  not  by  any 
means  as  much  appreciated  as  it  should  be.  Starv- 
ing such  services  is  an  easy  way  of  showing  book- 
keeping economies,  but  of  two  plants  one  of  which 
has  its  cost  of  equipment  service  50  per  cent  higher 
than  the  other,  the  money  saving  may  be  represented 
by  just  those  uneven,  broken  conditions  of  equip- 
ment service  that  pull  down  the  whole  efficiency  of 
manufacturing  without  anyone  being  able  to  lay  a 
finger  on  the  exact  place  where  inefficiency  exists. 

10.  Application  of  the  Second  Law  (con- 
tinued)— Remuneration  of  Effokt.  There 
is  without  doubt  a  good  field  for  special  re- 
muneration in  the  field  of  equipment  admin- 
istration.    It  divides  naturally  into  groups. 


THE    FUNCTION"   OF   EQUIPMENT  327 

each  of  which  is  a  sub-function  almost  inde- 
pendent of  the  others.  Such  sub-functions 
are  the  power  group,  the  building-mainte- 
nance group,  the  lighting  group,  the  various 
groups  of  repairmen,  the  cleaners  and  so 
forth.  There  seems  a  good  opportunity  here 
to  apply  the  principle  of  special  remunera- 
tion, based  on  the  maintenance  of  uniformity 
in  conditions.  Probably  group-incentive  is 
also  indicated. 

Such  Kemuneration  would  naturally  consist  of  a 
bonus  given  for  maximum  efficiency  being  attained 
in  keeping  equipment  services  up  to  standard.  De- 
ductions would  be  made  for  failure,  in  proportion  to 
its  gravity  and  extent.  A  high  degree  of  interest 
in  the  work  of  the  function  as  a  whole,  or  at  least 
in  the  more  closely  associated  work  of  the  sub- 
groups, should  be  developable  by  carefully  thought 
out  special  Eemuneration. 

11.  Application  of  the  Third  Law.  It  is 
worth  noting  that  the  function  of  equipment 
is  the  special  engine  by  aid  of  which  the 
first  sub-principle  of  this  law  is  set  in  mo- 
tion, namely,  that  ' '  Good  physical  conditions 
and  environment  should  be  maintained".  As 
already  stated,  the  Third  Law  reaches  its 
practical  application  not  in  functional  but 
in  individual  activity. 


328     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

Conclusion 

The  selection  and  installation  of  equip- 
ment has  a  separate  set  of  efficiencies  from 
its  current  working  or  administration.  Care- 
ful selection  and  arrangement  according  to 
the  Laws  of  Effort  is  essential  unless  the 
plant  is  to  be  burdened,  more  or  less  perma- 
nently, with  inefficient  conditions,  since  it  is 
the  function  of  equipment  to  provide  suit- 
able conditions  for  production  in  every  de- 
partment. 

Similarly,  when  the  equipment  has  been 
installed,  a  large  part  of  the  conditions  it 
sets  up  are  made  effective  only  by  efficient 
administration.  The  administrative  side  of 
equipment  deals  with  maintaining  suitable 
conditions.  However  good  the  equipment 
and  however  skilfully  it  may  have  been  ar- 
ranged in  the  first  instance,  the  realizable 
efficiency  will  depend  on  whether  the  Laws 
of  Effort  are  being  observed  in  running  it. 
Some  of  the  principal  ways  in  which  the  laws 
are  applicable  have  been  indicated. 

Both  in  installation  and  administration  of 
equipment,  there  are  standards  to  be  ascer- 
tained, and  lived  up  to.  These  standards 
are  also  subject  to  rectification  and  improve- 
ment from  time   to   time.     When  both   the 


THE    FUNCTION    OF    EQUIPMENT  329 

original  standards  of  installation  and  the 
current  standards  of  administration  are 
high,  the  function  will  be  working  at  its  best. 
If  either  of  them  has  been  organized  with- 
out reference  to  standards,  efficiency  is  a 
matter  of  luck  and  will  probably  be  much 
lower  than  it  should  be. 

TABLE   XV.       PRINCIPAL    APPLICATIONS     OF     ANALYSIS 
IN    REGARD   TO   EQUIPMENT. 

1.  Analysis  of  the  proposed  product,  with  a  view 

to  determine  what  kind  of  equipment  must 
be  provided  to  handle  the  volume  of  work 
expected. 

2.  Quantitative  analysis  of  the  different  kinds  of 

equipment  service  that  will  be  required,  un- 
der the  principal  divisions  of : — power  plant ; 
storage,  handling  and  conveying  facilities; 
operation  equipment;  offices;  and  the  build- 
ings that  will  be  required  to  house  these  ar- 
rangements. 

3.  Determination  of  space  allotment  required  for 

buildings,  yards,  offices  and  machinery, 
based  on   (2). 

4.  Analysis  of  route  to  be  followed  by  product, 

persons  and  communications  between  de- 
par  cments. 

5.  Analysis  of  route  to  be  followed  by  product, 

persons  and  communications  within  depart- 
ments or  shops. 

6.  Arrangement  of  buildings,  yards,  offices  and 

machinery  to  the  best  advantage  in  regard 
to  the  space  available,  based  on  (4)  and  (5). 


Chapter  XV 

ORGANIZING   THE    FUNCTION    OF   OPERA- 
TION 

T  T  may  be  well  to  consider  at  this  stage 
A  the  organization  of  the  function  of  Op- 
eration. Though  in  establishing  a  plant,  De- 
sign (that  is,  the  detailed  determination  and 
specification  of  what  we  intend  to  do)  must 
come  first,  and  consideration  of  Equipment 
next,  when  the  plant  is  actually  running  De- 
sign and  Operation  may  be  considered  a  pair 
of  functions  that  are  closely  inter-related, 
Comparison  and  Control  another  such  pair, 
while  Equipment  is  the  basic  function  which 
provides  conditions  for  all  these  activities. 
We  shall  therefore  consider  the  function  of 
Operation  here,  leaving  Comparison  and 
Control  to  later  chapters. 

Operation  is  that  function  which  has  to  do 
with  the  application  of  machine  processes, 
trades,  and  skills  to  effect  changes  in  the 
status  of  materials  in  accordance  with  the 
specifications  of  Design. 

330 


THE   FUNCTION    OF    OPERATION"  331 

Operation  is  the  synthesis  of  a  number  of 
separate  processes,  trades,  and  skills,  and 
usually,  but  not  always,  these  are  exercised 
through  the  operation  of  machines.  In  most 
industries  machines  occupy  nearly  the  whole 
field  of  Operation,  such  hand  skill  as  remains 
being  usually  occupied  in  giving  greater  fin- 
ish to  product  than  machines  can  be  made 
to  give.  Each  distinct  skill  or  machine  proc- 
ess is  a  unit  of  operation.  The  efficiency  of 
Operation  is  measured  by  its  success  in  ap- 
plying these  skills  to  product  so  as  to  carry 
out  the  specifications  of  design  with  the  least 
expenditure  of  effort. 

Operation,  therefore,  is  the  actual  techni- 
cal work  of  cutting,  twisting,  spinning,  weav- 
ing, heating,  mixing,  assembling,  etc.,  as  per- 
formed on  the  material  to  change  its  status. 
It  does  not  include  anything  other  than  this. 
Therefore  it  does  not  include  maintenance 
(which  belongs  to  Equipment),  inspection 
(which  belongs  to  Comparison),  or  handling 
of  product  (which  belongs  to  Control),  ex- 
cept that  portion  of  handling  which  com- 
prises placing  the  material  in  place  on  the 
machine  and  removing  it  from  the  machine 
after  the  work  which  actually  constitutes 
operation  is  performed  on  it. 


332    science  and  practice  of  management 

1.  Applying  the  First  Law  of  Effort. 
The  systematic  accumulation,  standardiza- 
tion and  application  of  experience  with  re- 
gard to  operation  has  two  sides,  one  of  which 
has  a  purely  technical  application,  and  the 
other  an  administrative  application.  As  has 
been  said  in  a  previous  chapter,  the  tech- 
nical efficiency  of  operation  lies  outside  the 
science  of  management.  It  may  be  a  matter 
of  chemistry,  or  of  physics,  or  of  mechanics, 
or  of  a  combination  of  these  sciences,  but  it 
is  not  a  part  of  the  science  of  administration. 
If  it  were,  then  every  separate  little  plant 
would  have  to  have  a  separate  science  of 
management  for  its  own,  which  is  obviously 
not  the  case. 

"While  therefore  the  first  Law  of  Effort 
holds  good  in  regard  to  technical  progress, 
we  have  not  to  consider  that  application  here. 
We  do  not  need  to  consider  the  different 
methods  of  accumulating  and  standardizing 
technical  experience  that  might  be  open,  for 
instance,  to  a  maker  of  microscopes  or  to 
a  maker  of  woolen  fabrics.  A  new  dye 
formula,  a  new  alloy  mixture,  a  new  special 
machine,  a  new  kind  of  material — all  these 
are  improvements  on  the  technical  side  of 
production,  but  except  in  so  far  as  they  may 


THE   FUNCTION    OF    OPEEATION  333 

modify  equipment,  and  change  the  order  and 
nature  of  operation  units,  they  have  nothing 
to  do  with  management  as  such. 

"What  then  are  the  standards  to  be  set  up 
in  regard  to  Operation  f  Obviously  they  will 
be  Operation  standards,  the  assumption  be- 
ing implied  that  the  processes  adopted  in  the 
plant  are  already  technically  correct.  But 
with  a  given  technical  process  there  is  a 
whole  range  of  possibilities  in  its  carrying 
out.  It  may  be  carried  out  with  the  mini- 
mum of  effort,  or  on  the  other  hand  very  in- 
efficiently. 

The  standards  which  we  must  seek,  then, 
are  those  of  efficiency  in  applying  current 
accepted  technical  processes  to  product.  We 
have  also  to  consider  the  working  of  the 
Operation  Function  as  a  whole,  a  thing  that 
we  are  unable  to  do  in  regard  to  any  other 
Function,  but  which  can  be  done  here  be- 
cause we  have  a  convenient  measure  of  effi- 
ciency. In  other  words,  we  have  an  easily 
applied  standard. 

Operation  standards  are  then  of  two  kinds, 
one  relating  to  the  efficiency  of  individual 
operation  units,  the  other  relating  to  the 
total  productive  capacity  of  the  plant. 


334      SCIENCE   AND    PEACTICE    OF    MANAGEMENT 

As  regards  the  first  of  these  it  is  really  surprising 
how  little  many  manufacturers  know,  and  are  con- 
tent to  know,  about  the  capacity,  duty,  demands,  and 
life  history  of  their  machines — the  pivotal  point  on 
which  their  whole  industry  turns.  Ask  a  question 
in  almost  any  shop  about  a  particular  machine,  and, 
in  nine  cases  out  of  ten,  if  there  is  any  intelligible 
answer  at  all,  it  will  be  an  empirical  one;  some  one, 
single,  unrelated  fact,  instead  of  a  range  of  facts 
with  defined  maxima  and  minima.  If,  for  example, 
one  inquires  about  the  capacity,  the  answer,  as  likely 
as  not,  will  be,  "We  have  gotten  as  many  as  50  of  our 
No.  3  collars  off  that  machine  in  an  hour".  If  one 
asks  about  the  power  consumption,  the  answer,  "Oh ! 
about  5  horse  power",  will  frequently  be  the  merest 
guess,  based  on  what  someone  once  told  someone 
else  about  a  machine  something  like  the  one  in 
question,  but  by  another  maker.  The  question, 
"What  does  it  cost  an  hour  for  the  productive  ca- 
pacity of  the  machine?"  will  be  met  by  an  amazed 
stare,  as  if  one  had  asked,  "What's  the  cost  of  a  sun- 
set?" It  is  only  within  recent  years  that  it  is  be- 
ginning to  be  understood  that  there  is  probably  a 
range  of  ratio  or  mathematical  relations,  between 
feeds,  speeds,  and  cuts  in  ordinary  machine  tools. 

Nor  has  the  recent  tendency  to  rely  almost  wholly 
on  the  analytical  method  greatly  helped  to  develop 
the  central  importance  of  knowing  everything  about 
the  machine.  It  has  rather  had  an  opposite  effect. 
It  has  tended  to  the  neglect  of  the  broad  and  general 
problems  which  hold  innumerable  detailed  problems 
in  their  solution,  and  focussed  attention  on  the  in- 
finitely little,  on  the  principle,  doubtless,  that 
"mony  mickles  make  a  muckle".  It  has  called  at- 
tention away  from  the  machine,  to  devote  all  its 
energies  to  individual  items  of  product.    In  some  in- 


THE   FUNCTION"    OF    OPERATION  335 

dustries  this  point  of  view  is  useful  and  even  neces- 
sary, but  even  here  the  range  of  capacity  of  the  ma- 
chines needs  much  more  attention  than  it  commonly 
receives. 

To  throw  further  light  on  this  question,  let  us 
glance  at  the  advantages  we  might  expect  to  realize 
by  indicating  machine  processes  in  terms  of  the  ca- 
pacity of  the  machine.  First,  for  each  type  of  ma- 
chine there  would  be  an  average  ratio  between  actual 
machining  time  and  preparation  time.  It  has  al- 
ready been  pointed  out  that  machines  earn  only  on 
their  operation  time  (i.  e.,  when  actually  cutting, 
spinning,  etc.)  ;  consequently  if  a  quick  method  of 
machining  (as,  for  example,  grouping  a  number  of 
small  parts  on  the  bed  of  a  large  planer)  is  accom- 
panied by  slow  methods  of  chucking  and  securing 
the  work,  it  may  be  (and  in  an  actual  case  was 
found  to  be)  economically  inferior  for  doing  the 
work  on  a  smaller  milling  machine,  under  condi- 
tions that  permitted  chucking  of  one  part  while  the 
other  was  under  the  tool,  and  consequent  continuous 
operation  of  the  machine. 

The  principle  of  the  conservation  of  effort  implies 
that  to  hold  a  machine  idle  during  preparation  is  a 
dead  loss,  and  consequently  that  the  shortening  of 
setting  operations  is  much  more  important  than  is 
often  realized. 

The  present  point,  is,  however,  that  for  each  ma- 
chine there  will  be  maximum  and  minimum  ra- 
tios of  preparation  time  to  machine  time,  which  are 
economically  reasonable,  and  if  this  maximum  is 
found  to  be  exceeded  on  any  job,  it  needs  attention. 

In  the  same  way,  for  each  machine,  and  for  all 
classes  of  work  done  in  any  one  kind  of  material  on 
it,  there  will  be  a  maximum  and  minimum  machin- 
ing time  per  unit  area.     Thus  in  1889  it  was  con- 


336      SCIENCE   AND   PRACTICE    OE    MANAGEMENT 

sidered  that  planing  a  large  continuous  surface  of 
cast  iron  required  from  three  to  five  hours  per  su- 
perficial foot.  The  turning  of  plain  rolled  shafting 
was  reckoned  at  thirty  minutes  per  foot  of  finished 
surface. 

Now  if  this  view  of  a  machine's  "duty"  were  de- 
veloped, and  if  attention  were  given  to  minutely  de- 
termining the  capacity  of  machines  for  the  different 
classes  of  work  in  vogue,  and  if  this  capacity  were 
expressed  first  in  terms  of  operation  time  per  unit 
of  surface,  and  in  ratio  of  preparation  time  to  opera- 
tion time,  we  should  be  in  possession  of  knowledge 
capable  of  being  co-ordinated  into  something  worth 
having.  This  is  the  direction  in  which  time  study 
and  analysis  should  be  turned,  because  the  results 
will  be  capable  of  comparison  and  grading,  and 
would  eventually  lead  to  something  like  real  stand- 
ardization of  machine  operations. 

Also  if  this  were  accomplished,  the  labor  price, 
being  associated  with  definite  standards  of  size  and 
area,  would  reach  common  ground,  and  lose  the  air 
of  a  stop-watch  inquisition  into  the  skill  of  the  man, 
which  some  methods  of  fixing  prices  now  have. 
Some  approach  to  a  standard  and  universal  price  list 
for  labor,  depending  on  recognizable  units,  would  be 
possible.  That  such  a  condition  is  ultimately  at- 
tainable is  certain,  because  though  work  is  infinite 
in  variety,  the  number  of  types  of  machine  is  limited, 
and  not  beyond  practical  means  to  investigate.  Ma- 
chine tools,  being  most  "universal"  in  their  range, 
are  the  most  difficult  of  all. 

The  second  kind  of  operation  standard  has 
relation  to  the  total  productive  capacity  of 
the  plant.    With  a  given  equipment  it  is  ob- 


THE   FUNCTION    OF    OPERATION  337 

vious  that  there  is  a  point  beyond  which  more 
output  cannot  be  obtained  by  any  means.  The 
practicable  normal  maximum  of  output  will 
probably  be  somewhat  lower  than  this  theo- 
retical maximum,  and  may  form  our  stand- 
ard of  operation  capacity.  As  all  the  other 
functions  exist  for  the  ultimate  purpose  of 
operation,  it  follows  that  all  their  expense 
falls  ultimately  on  Operation,*  and  is  charge- 
able on  the  product  "at  the  tool  point".  We 
are  therefore  able  to  express  the  total  pro- 
ductive capacity  of  the  plant  in  money  value, 
or  to  put  it  another  way,  we  find  that  our 
"capacity  to  produce' '  costs  money,  and 
may  be  standardized  in  dollars  rather  than 
in  any  other  kind  of  standard  notation. 

In  contemplating  our  shop  full  of  machines,  and 
having  arrived  at  a  clear  understanding  of  the  fact 
that  every  single  hour  of  their  "capacity  to  pro- 
duce" costs  money,  it  would  easily  be  deduced  that 
only  when  they  were  actually  cutting  were  they  earn- 
ing that  money.  From  this  it  is  but  a  step  to  real- 
ize the  importance,  not  only  of  keeping  them  at  work, 
but  of  recording  exactly  their  periods  of  work  and 
idleness.  This  idea,  so  likely  to  occur  to  anyone  who 
approaches  the  problem  without  being  influenced  by 
current  methods,  is  at  once  simple  and  obvious,  as 
well  as  far-reaching  in  its  importance. 

*  See  Chapter  VIII j  also  the  author's  "Production 
Factors '  \ 


338      SCIENCE   AND    PRACTICE    OE    MANAGEMENT 

For  all  that,  it  is  carefully  and  persistently  ig- 
nored in  most  shops.  It  is  because  the  average  fac- 
tory has  "just  growed,"  and  has  only  recently  begun 
to  feel  the  need  for  a  corporate  mind,  that  no  study, 
and  no  provision  for  study,  is  made  of  the  periods 
in  which  groups  of  machines  and  individual  machines 
are  "eating  their  heads  off".  Yet  it  is  obviously  the 
very  first  thing  we  ought  to  know  all  about.  To  >et 
about  doing  so  is  to  gather  very  pertinent  knowl- 
edge. 

Such  knowledge  is,  of  course,  of  no  use  as  a  col- 
lection of  isolated  facts.  It  requires  to  be  co-ordi- 
nated with  something  else.  To  know  that  Xo.  26 
grinder  has  been  stopped  two  hours  in  the  middle  of 
the  day  may  or  may  not  prove  to  be  useful;  but  to 
know  what  proportion  of  the  working  day  No.  26 
grinder  is  idle,  on  the  average,  may  be  the  starting 
point  of  interesting  discoveries.  The  How,  "When 
and  Why  of  its  periods  of  idleness  provides  a  mas- 
tery of  facts  that  can  easily  become  very  valuable. 

To  illustrate  a  few  of  the  ways  in  which  a  close 
scrutiny  of  the  periods  of  idleness  may  be  useful,  we 
may  consider  the  machine  that  "is  not  much  used". 
It  is  an  old  friend.  Physically  we  ignore  it,  as  we 
pass  by.  But  its  reproachful  presence,  day  after 
day,  week  after  week,  on  our  "idle-time"  chart,  will 
possibly  lead  to  a  job  being  schemed  out  suitable  for 
it.  Again,  irregular  duty  of  some  large  machine, 
totalling  up  possibly  into  a  considerable  loss,  may  be 
traced  to  inadequate  crane  service.  A  machine  that 
suddenly  develops  a  higher  average  of  idle  time  may 
prove  to  be  the  victim  of  a  new  class  of  work,  for 
which  chucking  arrangements  are  capable  of  improve- 
ment. Instances  like  these  might  be  multiplied  in- 
definitely. 

Really,  when  one  regards  the  matter  squarely,  it 


THE   FUNCTION"    OF   OPERATION  339 

becomes  amazing  that  the  control  of  idle  machine 
time  is  not  the"  very  first  thought  of  the  manage- 
ment. But  for  an  accidental  evolution  away  from 
the  idea,  it  certainly  would  have  become  so  long 
since.  Developing  things  in  their  logical  order, 
anew  from  the  beginning,  it  appears  obvious  that 
one  of  the  first  items  of  experience  to  be  accumu- 
lated and  systematically  used  will  be  this  very  one 
of  idle  time. 

The  employment  history  of  employees  is  not  in- 
frequently quite  carefully  compiled,  yet  the  life  his- 
tory of  machines  is  just  as  commonly  entirely  neg- 
lected. One  of  the  items  of  this  life  history — the 
daily,  monthly,  and  yearly  tale  of  its  idleness,  and 
consequent  failure  to  fully  meet  the  burden  of  its 
cost  of  "capacity  to  produce" — we  have  just  dis- 
cussed. Another  item  is  its  cost  for  repairs.  If 
the  truth  were  always  known  about  the  individual 
cost  of  repairs  of  every  machine  in  the  plant,  many 
accessions  to  the  scrap  heap  would  take  place,  with 
substantial  benefit  to  efficient  production.  The  two 
items  taken  together — loss  of  duty  through  idle  time, 
and  high  cost  of  repairs — would  cause  many  super- 
intendents' hair  to  stand  on  end,  when  they  scru- 
tinized the  life  history  of  the  productive  machines 
by  which  they  were  trying  to  make  money.  Ignor- 
ance is  bliss,  but  it  rarely  pays  high  dividends. 

It  may  be  mentioned  here,  though  the  matter  is 
rather  one  of  accounting,  that  the  life  history  of 
the  machine  should  include  its  capital  value,  its 
yearly  depreciation,  expectation  of  life,  and  similar 
data,  such  complete  history  being  specially  valuable 
in  prompt  settlement  of  fire  losses,  for  inventories, 
and  so  forth. 

As  the  years  pass,  such  a  life  history  becomes  more 
and   more  useful.     Most   machines   have   a   critical 


340      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

age  at  which  they  have  really  outlived  their  effi- 
ciency, and  the  falling  (depreciated)  value,  the  ris- 
ing cost  of  repairs,  and  the  idle  time,  taken  together, 
tell  the  story  with  an  accuracy  that  no  judgment 
based  on  superficial  appearances  can  pretend  to 
rival. 

In  determining  the  productive  capacity  of  a  plant, 
the  first  thing  is  to  know,  exhaustively,  what  each 
machine  will  do.  This  seems  obvious,  yet  in  prac- 
tice very  few  people  approach  the  problem  in  that 
way.  In  the  case  of  a  simple  automatic  machine,  a 
steam  stamp,  for  example,  punching  out  blanks  from 
continuous  strips  of  metal  (such  as  the  metal  parts 
of  umbrellas)  the  productive  capacity  of  the  ma- 
chine contains  very  few  factors.  With  a  uniform 
quality  and  thickness  of  material,  production  is  lim- 
ited only  by  the  rate  of  feed;  that  is,  the  number 
of  times  the  plunger  can  rise  and  fall  per  minute, 
making  a  clear  cut  stamping.  The  only  deductions 
necessary  are  those  due  (1)  to  changing  dies  for 
sharpening,  or  alteration  of  pattern,  and  (2)  to  re- 
plenishing the  supply  of  strip.  This  latter  is  usually 
negligible. 

With  the  "Production  Factor"  method  of  ascer- 
taining hourly  machine  cost,  the  cost  and  profit 
making  price  of  product  of  such  a  machine  can  be 
forecast  with  minute  accuracy. 

2.  Application  of  the  Second  Law.  Divi- 
sion of  Effort.  The  degree  of  division  of 
effort  in  operation  is  conditioned  by  the 
state  of  development  of  the  particular  in- 
dustry, and  also,  in  many  cases,  by  the  vol- 
ume of  output.    Units  of  operation  are  fixed 


THE   FUNCTION    OF    OPERATION  341 

and  set  in  some  industries,  and  cannot  be 
varied  save  by  new  invention.  But  the 
tendency  of  division  of  effort  in  operation 
is  very  clear.  It  is  towards  developing  units 
of  operation,  each  requiring  simple  skill,  and 
towards  the  elimination  of  units  requiring 
high-grade  skill.  In  any  new  plant,  the 
question  of  the  degree  of  division  to  which 
operation  is  to  be  carried  is  a  matter  of 
grave  consideration.  Many  of  the  advan- 
tages to  be  gained  in  competition  with  es- 
tablished businesses  may  be  based  on  setting 
up  a  somewhat  greater  degree  of  division 
of  operation  into  simpler  units  than  has  hith- 
erto been  customary  in  the  particular  in- 
dustry. 

3.  Second  Law  of  Effokt  (continued). 
Co-okdination  of  Effokt.  Whatever  the  de- 
gree of  division,  Operation  must  necessarily 
be  a  complete  synthesis,  without  gap  or  over- 
lap in  the  series  of  processes.  In  replacing 
a  unit  operation  by  two  or  more  requiring 
simpler  skill,  this  principle  needs  observing 
— nothing  must  be  lost  in  the  division.  What 
is  sometimes  lost  is  complete  co-ordination; 
the  new  processes  do  not  perhaps  cover  pre- 
cisely the  same  ground  as  the  old  one,  but 
require  complementary  hand  work  to  effect 


342     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

the  former  finish  or  the  former  accuracy. 
Eeal  gap  is  rare  in  operation  as  its  presence, 
if  marked,  would  bring  production  to  a  stop. 
In  some  industries,  however,  notably  ma- 
chine shops,  something  like  overlap  occurs, 
in  that  several  types  of  machine  (e.  g., 
planers  and  milling  machines)  have  closely 
similar  operative  effect.  In  such  cases  a  cus- 
tomary use  for  each  should  be  set  up  as  far 
as  possible,  even  when  either  may  be  used  in- 
differently on  certain  work.  Imperfect  ma- 
chine work,  requiring  expensive  hand  fitting 
when  assembling,  is  the  most  common  in- 
stance of  poor  co-ordination  in  operation. 
This  is  quite  apart  from  similar  want  of  co- 
ordination that  may  be  caused  by  neglect  to 
specify  limits  and  fits  in  connection  with  the 
Design  of  the  parts.  This  last  is  gap  in  De- 
sign, not  in  Operation. 

4.  Second  Law  of  Effoet  (continued) — 
Conservation  of  Effort.  The  application  of 
this  principle  has  been  fairly  covered  above 
in  our  discussion  of  standards  of  operation. 
Where  it  is  possible  to  do  so,  analysis  of 
machine  operation  rather  than  of  the  prod- 
uct should  be  the  end  to  which  time  study 
and  motion  study  should  be  directed.  The 
reduction  of  preparation  time  to  a  minimum 


THE   FUNCTION"    OF   OPERATION  343 

should  be  sought,  since  anything  that  holds 
back  the  machine  from  4)eing  actually  en- 
gaged on  altering  the  status  of  material  is 
a  dead  loss  of  productive  capacity.  The 
study  of  capacity  of  machines ;  what  they  will 
do  (not  merely  what  it  has  been  customary 
to  expect  from  them) ;  how  far  they  may  be 
speeded;  how  long,  on  the  average,  they  are 
idle;  how  far  they  are  subjected  to  stop- 
pages and  why;  how  far  preparation  time 
can  be  shortened;  and  similar  matters,  are 
the  true  sphere  of  conservation  of  effort  in 
regard  to  operation.  Further,  the  aggregate 
of  answers  to  these  questions  will  show  the 
way  to  conserve  the  "capacity  to  produce" 
of  the  Operation  function  as  a  whole,  and  to 
eliminate  idle  time  to  a  considerable  extent. 


A  corollary  of  this  principle  establishes  a  rule, 
frequently  neglected,  namely,  that  all  Effort  classed 
and  paid  for  as  operative  should  be  focussed  on  oper- 
ation. Workmen  and  operation  officials  should  not 
be  made  into  clerks.  Amongst  other  things  it  may 
be  pointed  out  that  the  foreman  represents,  more 
than  anything  else,  the  te clinical  efficiency  of  opera- 
tion. The  analytical  school  of  management  has  had 
dreams  of  abolishing  the  foreman,  but  this  is  sim- 
ply because,  having  relieved  him  of  some  of  his 
administrative  duties,  they  did  not  observe  his  place 
in  the  synthesis  of  production.  He  is  the  repository 
of  technical   experience   at  the   fighting  line,   quite 


344      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

apart  from  his  administrative  duties,  be  these  heavy 
or  light. 


5.  Second  Law  of  Effort  (continued) — ■ 
Eemuneration  of  Effort.  Generally  speak- 
ing, the  field  for  remuneration  of  effort  in 
Operation  is  the  largest  of  all,  and  it  has 
hitherto  held  most  of  the  attention  of  in- 
vestigators. Its  special  feature  is  reward 
for  turning  out  the  largest  amount  of  prod- 
uct with  the  least  application  of  effort,  i.  e., 
in  the  shortest  time.  It  is  the  merit  of  the  an- 
alytical school  of  management  that  it  has 
discovered  that  the  operative  alone  can  only 
go  a  short  way  towards  bringing  about  maxi- 
mum production.  The  present  study  of  the 
subject,  it  is  hoped,  also  throws  light  on  this 
subject,  by  showing  what  other  clearly  de- 
finable Functions  than  that  of  operation  are 
engaged  in  the  synthesis  of  production,  and 
that  their  efficient  functioning  is  a  matter 
quite  apart  from  anything  the  workman 
can  do. 

The  subject  of  remuneration  in  Operation 
is  a  large  one  and  has  already  a  considerable 
and  important  literature  of  its  own.  In  the 
appendix  to  this  book  some  aspects  of  it  have 
been  discussed.     It  is  therefore  only  neces- 


THE   FUNCTION    OF    OPERATION  345 

sary  to  say  here  that  in  various  industries 
different  bases  for  special  remuneration  may 
be  employed.  In  the  general  run  of  plants 
premiums  or  bonuses  are  based  on  doing 
standard  quality  of  work  in  least  time,  and 
in  some  cases  this  principle  is  extended  by 
offering  supervisors  a  bonus  based  on  the 
bonus  earnings  of  their  operatives.  Another 
class  of  bonus  is  based  on  the  reduction  of 
wastes,  or  economy  in  the  use  of  materials, 
when  these  elements  of  efficiency  lie  within 
the  more  or  less  careful  exercise  of  skill  of 
the  operative.  Yet  another  class  is  based 
on  the  continuous  operation  of  machines, 
when  the  latter  is  dependent  on  the  skill  or 
attention  of  the  workman.  Other  special  re- 
wards in  regard  to  Operation  are  based  on 
suggestions  for  improvement  in  processes, 
machines  or  methods,  and  for  means  of  re- 
ducing wastes. 

6.  Third  Law  of  Effort.  The  remarks  on 
this  law  with  regard  to  the  other  functions 
apply  to  Operation  also.  As,  however,  the 
operating  force  usually  outnumbers  that  of 
all  the  other  functions  put  together,  its  ap- 
plication to  the  operatives  should  be  most 
carefully  considered,  and  each  of  its  provi- 
sions put  into  force  as  far  as  possible,  so  as 


346      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

to  create  a  satisfactory  atmosphere  among 
the  human  factors  of  this  function. 

TABLE    XVI.       PRINCIPAL    APPLICATIONS    OF    ANALYSIS 
IN    REGARD    TO    OPERATION. 

1.  Analysis  of  the  different  skills,  trades,  callings 

and  machine  processes  into  operation  units. 
(Note. — Units  of  design  must  correspond 
exactly  with  these  operation  units.) 

2.  Analysis  of  the  scope  or  range  of  each  ma- 

chine, where  it  is  capable  of  performing 
more  than  one  operation,  or  can  be  varied 
in  capacity,  speed,  feed,  etc. 

3.  Analysis,  by  means  of  motion  study,  of  the 

various  steps  of  feeding  material  to  and  op- 
erating each  machine.  This  is  the  most  val- 
uable field  for  the  employment  of  motion 
study,  inasmuch  as  the  new  standards  thus 
set  up  can  be  fostered  into  new  habit  on 
the  part  of  the  operator. 

4.  Analysis  of  the  productive  capacity  of  each 

machine  or  "production  center",  so  that  a 
"loading  standard"  can  be  set  up.  The  aver- 
age amount  of  product  turned  out  in  a  given 
period  can  then  be  calculated  and  made  use 
of  in  arranging  sequence  of  orders  and  mak- 
ing promises  of  delivery. 

5.  Analysis  of  the  "total  effective  production  ca- 

pacity" of  the  plant,  based  on  number  of 
working  hours  in  a  given  period,  so  that 
"capacity  used'7  can  be  distinguished  from 
"capacity  wasted",  and  thus  a  measure  of 
the  general  efficiency  of  production  in  each 
shop  set  up. 

Note. — The  analysis  of  individual  items  of  product  by 
time  or  motion  study  is  a  part  of  Design,  q.  v. 


Chapter   XVI 

ORGANIZING  THE  FUNCTION  OF  COMPARI- 
SON 

T^  XECUTIVE  success  depends  upon  three 
elements:  (1)  recognition  of  what 
facts  are  truly  significant;  (2)  accurate  rec- 
ord and  convenient  presentation  of  these 
facts;  (3)  judicious  action  based  on  study 
of  the  facts.  Executive  success  is  therefore 
largely  dependent  on  the  function  of  Com- 
parison. 

Modern  management  is  coming  more  and 
more  to  be  based  on  measurement.  Whilst 
the  effectiveness  of  control  depends  upon  the 
personality  of  the  executive,  it  is  evident 
that  an  accurate  knowledge  of  the  nature  and 
extent  of  the  changes  set  up  by  Production 
is  necessary  to  every  executive,  if  wise  de- 
cisions and  judicious  control  are  to  result. 
Many  firms  have  had  reason  to  regret  de- 
cisions taken  on  the  faith  of  hastily  compiled 
"  statements '  ',  though  prepared  by  the  offi- 
cials without  any  intention  to  deceive,  but 
on  the  contrary  with  entire  faith  in  their  ac- 
347 


348        SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

curacy  and   confidence  in   their  representa- 
tive character. 

It  may  not  be  evident  at  first  sight  that  the  basis 
of  Comparison  is  for  the  most  part  accounting.  This 
is  because  few  people  understand  what  modern  ac- 
counting really  is.  Popularly  it  is  supposed  to  be 
concerned  with  the  verification  of  cash  and  balance 
sheets,  but  this  is  only  one  branch  of  the  subject. 
Accounting  in  its  broadest  sense  is  the  practical  ap- 
plication of  the  science  of  quantities.  It  measures 
and  records,  not  merely  cash,  but  every  hind  of 
quantity  that  is  concerned  in  the  processes  of  a  busi- 
ness. It  measures  and  records  these  quantities  by 
means  of  general  laws  which  are  independent  of  the 
kind  of  quantities  involved,  and  proves  the  accuracy 
of  its  measurements  by  recognizing  that  every  change 
in  a  quantity  is  necessarily  merely  one  of  a  series 
of  changes,  all  of  which  form  dependent  sequences. 

Failure  to  realize  increased  net  profit  which  some- 
times attends  reorganizations  is  frequently  due  to 
the  fact  that  such  work  has  been  undertaken  without 
the  safeguard  of  analytical  accounting.  It  is  not  very 
difficult  to  show  savings  in  any  one  quantity — say, 
for  example,  direct  labor — and  as  a  matter  of  fact  it 
is  the  easiest  thing  in  the  world  to  deceive  oneself 
as  to  the  effect  of  changes  in  method  and  routine 
unless  results  are  controlled  and  safeguarded  by  a 
thoroughly  modern  accounting  system,  designed  and 
installed  by  experts  possessing  both  the  necessary 
technical  knowledge  of  the  principles  of  management, 
and  of  the  principles  as  well  as  the  everyday  practice 
of  accounting. 

1.  Application  of  the  First  Law.    While 
all  departments  of  the  function  of  Compari- 


THE    FUNCTION    OF    COMPARISON  3^9 

son  employ  methods  which  have  already  been 
developed  to  a  high  degree  of  precision,  the 
internal  organization  of  no  other  function, 
save  that  of  Control,  needs  such  careful  se- 
lection of  means  and  such  careful  planning 
out  of  aims  or  ends,  if  efficient  results  are 
to  be  found. 


The  work  of  the  Function  is  the  accurate  deter- 
mination and  record  of  significant  Quantities.  The 
difficulty  of  the  problem  lies  in  the  fact  that  shrewd 
analysis  is  frequently  necessary  to  determine  what 
is,  or  is  not,  a  quantity  sufficiently  significant  to  be 
worthy  of  separate  measurement.  The  general  cloud 
under  which  the  question  of  "Burden"  rests,  and 
the  vague  ideas  as  to  its  significance  held  by  many 
manufacturers,  are  examples  of  the  kind  of  prob- 
lem met  with  by  the  expert.  Here  it  is  not  a  ques- 
tion of  mere  subdivision  of  items — an  operation  fre- 
quently mistaken  for  analysis  by  those  unfamiliar 
with  scientific  accounting — but  of  so  grouping  ulti- 
mate details  that  some  significance  can  be  extracted 
from  the  interplay  of  the  various  groups,  and  their 
rise  and  fall. 

The  selection  and  synthesis  of  unit  quantities  is,  in 
fact,  no  fit  work  for  the  amateur,  even  though  closely 
in  touch  with  the  technics  of  his  particular  manu- 
facture. So  far  from  being  able  to  apply  the  neces- 
sary analysis  and  synthesis  to  their  own  business  to 
effect  control,  not  a  few  manufacturers  do  not  even 
know  what  data  they  should  have  before  them  to 
effect  that  control.  And  between  knowing  what  they 
are  and  getting  them  is  frequently  a  long  path.  It 
is  not  infrequently  the  case  that  the  constructive  ac- 


350     SCIENCE  AND   PEACTICE   OF   MANAGEMENT 

countant  has  to  give  considerable  study  in  order  to 
indicate  to  the  executive  just  what  data  he  ought 
to  have,  and  why  he  ought  to  have  them. 

The  reason  why  the  measurement  of  quantities 
needs  to  be  conducted  with  considerable  exactness  is 
that  in  a  manufacturing  business  every  change  in 
the  value  or  amount  of  a  quantity  is  related  to 
change  in  one  or  more  other  quantities.  Unless  pre- 
cautions are  taken  to  record  these  changes  in  such 
a  form  that  they  can  be  proven,  one  by  the  other, 
the  records  become  mere  inaccurate  memoranda,  and 
action  based  on  such  is  frequently  discovered  sub- 
sequently to  have  been  a  grave  mistake.  Even  in  re- 
gard to  such  purely  technical  matters  as  the  efficiency 
of  particular  types  of  machines,  properly  designed 
systems  of  accounting  give  the  most  valuable  assis- 
tance in  determining  just  what  types  should  be  pur- 
chased when  extensions  are  in  hand. 

As  an  example  of  the  selection  and  use  of  signifi- 
cant data,  reference  may  be  made  to  the  case  of  a 
business  on  the  verge  of  bankruptcy  that  had  been 
losing  money  for  several  successive  years.  This  was 
not  only  saved  from  breaking  up,  but  actually  trans- 
formed its  losses  into  a  profit  of  some  $100,000  a 
year,  entirely  through  effective  control  brought  about 
by  modern  analytical  accounting.  It  was  found  that 
some  lines  were  reasonably  profitable,  while  others 
believed  to  form  the  staple  of  the  business  were  be- 
ing sold  for  less  than  they  really  cost,  at  that  time. 
Once  these  facts  were  made  known  to  and  proven  to 
the  satisfaction  of  the  directors  of  this  concern,  they 
were  enabled 'to  make  decisions  without  fear  of  mis- 
takes, and  very  soon  took  measures  to  eliminate  the 
losses  and  push  the  profitable  lines  of  product.  Such 
rectifications  are  no  uncommon  experience  where 
modern  methods  of  control  are  adopted. 


THE   FUNCTION   OF   COMPARISON  351 

The  accumulation,  standardization  and  application 
of  experience  in  regard  to  Comparison  is,  at  the  pres- 
ent day,  a  task  which  is  almost  wholly  a  professional 
one.  It  has  a  large  literature  and  forms  a  complete 
study  in  itself.  It  is  therefore  obvious  that  it  cannot 
be  condensed  into  a  few  happy  phrases,  because  each 
plant  furnishes  different  problems  of  a  much  mor3 
obscure  character  than  is  the  case  with  either  of  the 
functions  already  discussed. 

2.  Application  of  the  Second  Law.  Divi- 
sion of  Effort.  Units  of  comparison  must 
be  set  up.  Unless  we  have  similar  units  of 
quantity  and  similar  notations  one  thing  can- 
not be  compared  with  another.  These  units 
are  of  two  kinds,  those  connected  with  the 
chemical  and  physical  status  of  material,  and 
those  dealing  with  time,  quantity,  number 
and  value. 

The  first  class  includes  the  testing  of  materials  for 
comparison  with  previously  determined  requirements 
as  set  out  in  standard  specifications.  It  also  in- 
cludes the  Inspection  of  product,  i.  e. — its  compari- 
son with  previously  set  requirements  of  finish,  limits 
and  dimensions.  The  measurement  of  power  as  de- 
livered to  various  departments  day  by  day — an  im- 
portant record  very  frequently  neglected;  the  re- 
cording of  shop  temperature;  pyrometric  records  in 
certain  kinds  of  furnaces;  recording  tachometers  for 
comparing  shaft  speeds  where  uniform  speed  is  im- 
portant— all  these  are  examples  of  physical  compari- 
sons, to  which  in  most  cases  no  money  values  can  be 
assigned,  and  therefore  they  are  not  controlled  or 
verified  in  any  way  by  accounting  methods. 


352     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

The  second  class  comprises  comparison  of  quanti- 
ties that  enter  into  Operation,  e.  g. — the  measure- 
ment of  labor  time  and  machine  time;  the  division 
of  the  latter  into  time  consumed  in  setting  and  in 
cutting;  the  analysis  of  machine  time  into  that  uti- 
lized on  work,  and  that  falling  into  the  category  of 
"wasted  capacity".  Further,  this  class  comprises  the 
record  of  labor  and  machine  time  on  product  at 
every  one  of  the  successive  stages  it  reaches,  and 
particularly  the  influence  of  doing  the  same  work  in 
different  ways  and  on  different  machines.  The  rec- 
ords in  this  class  are  also  always  expressed  in  money 
values  as  well  as  in  measured  time,  and  so  fall  under 
the  control  of  the  accounting  system  and  are  proven 
by  the  latter.  Finally  it  comprises  the  record  of 
quantities  of  product,  whether  expressed  by  number 
or  weight. 

In  the  second  class  is  also  included  the  measure- 
ment of  the  indirect  services  and  production  factors 
which  are  maintained  for  the  purpose  of  keeping  the 
machines  at  work.  Though  these  rest  primarily  on 
the  measurement  of  quantities,  such  as  land  area, 
building  floor  space,  horse  power,  and  so  forth,  they 
differ  from  the  first  class  of  comparisons  in  that 
money  values  are  always  connected  with  them,  and 
consequently  that  they  can  be  rigorously  checked, 
controlled,  and  proved  by  the  general  accounting  sys- 
tem.* 

One  of  the  things  that  strike  us  in  most  busi- 
nesses when  we  study  the  connected  series  of  effort 
that  makes  up  the  full  activity  of  a  plant  is  the 
presence  of  wastes.  These  may  occur  in  the  depart- 
ment of  organization,  as  in  too  high  cost  of  power, 
or  of  transport;  or  in  operation,  as  in  the  case  where 
material  is  spoiled  and  fails  to  pass  inspection.     In 

*  See  Chapter  VIII. 


THE    FUNCTION"    OF    COMPARISON  353 

some  businesses,  of  course,  quite  a  high  percentage  of 
wasted  effort  is  inseparable  from  the  nature  of  the 
operations,  as  in  some  classes  of  foundry  work.  The 
recording  of  wastes  in  such  a  way  that  their  causes 
can  be  analyzed  and  as  far  as  possible  removed  is 
sometimes  a  matter  of  difficulty,  but  is  always  a  most 
desirable  and  important  feature,  too  much  over- 
looked. Generally  speaking,  records  of  wastes  are 
worthless  if  not  tied  into  the  general  accounting  sys- 
tem of  the  plant.  It  is  only  recognizing  the  limita- 
tions of  fallible  human  nature  to  say  that  they  will 
always  be  concealed  when  possible.  Consequently 
the  tally  of  wastes  must  be  proven  by  some  other 
means  than  an  unverified  statement. 


3.  The  Second  Law  of  Effoet  (contin- 
ued). Co-okdination  of  Effoet.  The  prac- 
tical result  of  applying  the  principle  of  di- 
vision of  effort  to  Comparison  is  that  we  set 
up  a  series  of  isolated  comparison  units  or 
"  transactions  ",  each  of  which  forms  a  stand- 
ard with  which  something  has  to  be  com- 
pared. Necessarily  each  transaction  has 
definite  limits,  or  we  could  not  record  it. 
Now  the  principle  of  co-ordination  demands 
that  all  these  unit  transactions  taken  to- 
gether shall  cover  the  whole  of  the  activities 
of  the  plant  without  ' '  gap  or  overlap ' '.  The 
sphere  of  each  unit  must  be  so  delimited  that 
it  leaves  nothing  to  be  recorded  between  it- 
self and  the  next  unit.     Neither  must  any 


354      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

transaction  be  recorded  twice — one  record 
should  cover  all  information  required  about 
that  transaction. 


This  does  not  imply  that  exceeding  minuteness  in 
recording  is  necessary.  Some  kinds  of  transaction 
can  be  dealt  with  broadly,  others  in  great  detail,  but 
even  .in  the  former  case  there  must  be  nothing  left 
out  between  one  such  broad  grouping  and  the  next. 
This  is  one  of  the  pitfalls  of  amateur  organizers. 
Either  they  insist  on  the  most  minute  records,  with- 
out giving  adequate  exercise  to  their  sense  of  pro- 
portion, or  they  endeavor  to  economize  work  by 
leaving  out  matters  which  are  really  significant. 

Further,  complete  co-ordination  is  the  only  path  to 
results  which,  when  presented  monthly  or  periodi- 
cally, are  significant  and  intelligible.  One  test  of 
this,  and  an  imperative  condition  of  success,  though 
it  is  not  entirely  exhaustive,  is  that  all  figures  that 
deal  with  money  values  should  be  provable  and  proved 
with  the  financial  books  of  the  concern.  Figures  that 
do  not  do  this  are  worthless  and  dangerous,  but  even 
when  they  do,  it  does  not  follow  that  co-ordination  is 
complete  for  all  purposes  for  which  the  records  may 
be  required.  This  can  be  ensured  by  only  expert 
analysis,  on  the  one  hand,  and  by  practical  experi- 
ence on  the  other. 


4.  Second  Law  of  Effokt  .(continued). 
Conservation  of  Effort.  Having  set  up 
units  of  comparison  in  regard  to  all  signifi- 
cant transactions  and  having  made  sure  that 
they  are  so  co-ordinated  as  to  form  a  com- 


THE    FUNCTION    OF    COMPARISON  355 

plete  synthesis  without  "gap  or  overlap", 
it  becomes  necessary  as  the  next  step  to  en- 
sure that  the  amount  of  effort  involved  in 
the  observation,  record,  presentation  and 
comparison  of  the  resulting  data  is  at  a  min- 
imum. The  shortest  path  from  the  unit  fact 
to  the  final  statistics  must  be  sought.  Me- 
chanical aids  should  be  used  where  possible, 
but  judiciously. 

To  effect  this  conservation  of  effort  very  careful 
scrutiny  of  the  whole  system  of  statistics  is  requisite. 
In  many  plants,  where  old-fashioned  methods  are 
in  vogue,  endless  copying  from  one  record  to  an- 
other goes  on.  Large  'tabular  statements  are  pre- 
pared, full  of  detail  that  is  not. only  unnecessary,  but 
is  an  obstacle  to  the  quick  summation  and  seizing  of 
the  significance  of  the  figures.  The  facility  with 
which  voluminous  statistics  can  be  prepared  by  me- 
chanical aids  has  also  given  rise  to  much  unneces- 
sary work,  and,  instead  of  .fitting  the  machine  to  the 
work,  the  work  is  too  often  arranged  to  suit  the 
range  of  action  of  some  machine.  The  principle 
that  no  data  are  worth  recording  unless  they  are 
to  be-  compared  with  something,  either  a  standard 
arising  out  of 'the  experience  of  the  past,  or  a  con- 
templated repetition  of  the  same  work  in  the  future, 
is  frequently  overlooked.  This  is  simple  waste  of 
effort.  Simplicity  of  "system"  is  indicated  by  the 
principle  of  conservation  of  effort  in  regard  to  com- 
parison, and  this  does  not  mean  an  insufficient  sys- 
tem, but  one  in  which  every  effort  has  a  definite 
economic  value  in  its  contribution  to  the  system  of 
Comparison  as  a  whole. 


356    science  and  practice  of  management 

5.  Second  Law  of  Effort  (continued). 
Eemuneration  of  Effort.  Very  little  at- 
tempt has  been  made,  so  far,  to  apply  special 
reward  to  those  engaged  in  the  function  of 
Comparison.  The  lines  along  which  this  de- 
velopment should  take  place  are,  however, 
not  difficult  to  determine.  Efficiency  in  com- 
parison is  (as  regards  its  routine  work,  and 
quite  apart  from  the  structure  of  the  sys- 
tem employed)  almost  wholly  dependent  on 
two  factors — accuracy  and  promptness.  The 
first  of  these  applies,  of  course,  not  only  to 
the  first  record,  the  observation  of  unit  facts, 
but  also  to  all  subsequent  handling  of  the 
data.  Both  the  technical  and  the  clerical 
work  of  comparison  is  dependent  for  its 
value  on  accuracy.  Similarly,  data  which 
are  only  available  fpr  study  and  discussion 
long  after  the  facts  on  which  they  are  based 
have  passed  out  of  the  memory  of  the  indi- 
viduals concerned  in  the  transactions  are  of 
exceedingly  little  value  compared  with  data 
presented  as  it  were  red-hot  on  the  heels  of 
the  transaction  immediately  after  its  occur- 
rence. 

In  working  out  methods  of  special  remuneration 
for  this  function,  a  natural  standard  of  100  per  cent 
accuracy  can,  of  course,  be  taken.     This  theoretical 


THE    FUNCTION    OF    COMPARISON  357 

perfection  can  have  a  definite  amount  of  bonus  at- 
tached to  it,  with  deductions  for  failure  to  reach 
standard.  In  regard  to  promptness,  however,  no 
such  natural  standard  can  be  found.  It  is  not,  in 
fact,  necessary  that  all  classes  of  transaction  should 
be  worked  up  into  final  data  with  the  same  amount 
of  urgency.  In  proportion  as  transactions  are  numer- 
ous and  small,  as  for  example  the  issue  of  stores,  or 
the  recording  of  men's  time  on  jobs,  the  urgency  is 
greater,  since  the  memory  of  such  transactions  passes 
after  the  lapse  of  a  few  days  in  most  cases.  If  in- 
quiry is  to  be  made,  therefore,  it  can  be  made  with  a 
fair  chance  of  success  only  if  made  within  a  day  or 
so  at  latest.  The  setting  up  of  standards  for  prompt- 
ness must  therefore  be  carefully  worked  out,  with  all 
the  circumstances  of  each  class  of  transaction  taken 
into  consideration. 

In  this  function,  as  in  the  others,  it  may  be  worth 
while  to  offer  prizes  for  suggestions  tending  to  im- 
prove routine,  or  for  pointing  out  causes  of  inaccu- 
racy in  methods  of  collecting  unit  information  at  its 
source. 


6.  Third  Law  of  Effort.  Among  the  ap- 
plications of  this  Law  to  the  personnel  of 
the  Comparison  function,  the  question  of 
proper  physical  conditions  and  surroundings 
appropriate  to  each  official's  work  should 
have  special  consideration.  Vocational  fit- 
ness has  also  an  important  bearing,  the  study 
of  qualifications  for  the  different  kinds  of 
work  grouped  under  Comparison  being  little 
advanced  at  the  present  moment;    yet  to  a 


358      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

greater  extent  than  in  any  function  that  we 
have  hitherto  discussed,  except  that  of  De- 
sign, a  good  deal  of  success  depends  on  hav- 
ing precisely  the  right  type  of  individuality 
engaged  in  observing  and  recording  data,  a 
type  which  is  probably  quite  different  from 
that  necessary  for  its  routine  working  up 
into  final  form. 

TABLE   XVII.      PRINCIPAL  APPLICATIONS   OF  ANALYSIS 
IN  REGARD  TO  COMPARISON. 

1.  Analysis  of  operation  sequences,  to  determine 

at  what  points  inspection  is  necessary. 

2.  Analysis  of  all  accessory  services  (power,  etc.) 

to  determine  the  points  at  which  observation 
and  record  are  necessary. 

3.  Analysis  of  operation  sequences,  to  determine 

between  which  points  costs  should  be  taken 
out. 

4.  Analysis  of  the  different  sources  of  wastes,  to 

determine  at  what  points  they  should  be  ob- 
served and  recorded. 

5.  Analysis  of  the  material  situation,   to  deter- 

mine what  varieties  of  material  should  be 
subjected  to  chemical  examination  or  physi- 
cal inspection  on  receipt  in  stores. 

6.  Analysis  of  burden  to  determine  how  it  should 

be  charged  against  production  capacity. 


Chapter    XYII 
ORGANIZING  THE  FUNCTION  OF  CONTROL 

'  I  AHE  function  of  Control  must  be  consicl- 
ered  from  two  sides,  installation  and 
administration.  Installation  provides  the 
scheme  of  dnties;  administration  provides 
the  men  and  the  action.  As  has  been  stated 
in  a  former  chapter,  Control  is,  popularly 
speaking,  the  function  of  the  "boss"  and  is 
the  last  function  remaining,  when,  in  the  suc- 
cessive devolutions  of  functions  during  the 
rise  of  an  industry  to  modern  complexity,  all 
the  other  functions  have  been  shed. 

Installation  of  Control 

Material  and  equipment  being  perfectly  in- 
ert, and  giving  rise  to  no  change  by  them- 
selves, it  follows  that  production  is  a  result 
of  the  actions  of  living  persons.  In  prac- 
tice the  duties  of  such  persons  have  to  be 
organized  according  to  a  definite  scheme,  so 
that  each  has  certain  specified  work  to  at- 
tend to.  It  is  obvious  that  such  allotment  of 
duties  will  be  affected  by  the  Laws  of  Ef- 
359 


360      SCIENCE   AXD    PRACTICE    OF    MANAGEMENT 

fort,  and  will  need  standardizing,  dividing, 
co-ordinating,  conserving,  etc.  The  plan- 
ning of  snch  a  scheme  of  duties  is  the  "  in- 
stallation' '  of  Control. 

The  planning  of  duties  within  each  func- 
tion is,  of  course,  as  much  a  part  of  Control 
as  any  other.  But  we  do  not  need  to  con- 
sider it  here,  for  the  reason  that  all  its  prob- 
lems have  been  discussed  under  the  head  of 
each  function  already.  This  leaves  us  with 
the  necessity  for  planning  the  relations  be- 
tween the  functions,  and  of  those  duties  pe- 
culiar to  the  function  of  Control  which  are 
not  included  in  any  other  function.  In  other 
words  Control  plans  all  duties  whatever,  but 
as  whole  groups  of  such  duties  are  handed 
over  to  other  functions  to  perform,  we  need 
not  consider  them  over  again. 

The  aim  of  Control  is  the  setting  of  things 
in  motion.  We  may  picture  to  ourselves  all 
our  other  functions  fully  organized  and  wait- 
ing to  begin — Designers  and  production  men 
ready  for  work;  equipment  installed,  en- 
gineers ready,  repairmen  organized;  opera- 
tion machines  installed  and  men  standing  at 
them;  comparison  methods  worked  out  and 
the  staff  at  their  posts — but  there  is  still 
needed  something  to  set  them  all  in  motion. 


THE   FUNCTION    OF    CONTROL  361 

This  thing  wanted  is  the  will  of  the  boss,  ex- 
pressed in  orders.  Practically  this  is  given 
effect  in  modern  plants,  not  by  a  single  man 
who  gives  the  word  to  "go",  bnt  by  a  more 
or  less  elaborate  organization,  which  makes 
it  its  special  business  to  attend  to  the  regu- 
lar and  systematic  issue,  dissection  and  dis- 
tribution of  Orders.  The  Installation  of  Con- 
trol is  the  preparation  of  the  scheme  of  this 
organization.  It  establishes  the  mechanism 
of  the  Function. 

Administration  of  Control 

We  have  then  to  consider  this  mechanism 
at  work.  The  personnel  being  installed,  each 
member  of  it  with  his  specified  range  of 
duties,  the  issue  of  orders  begins.  But  as 
the  work  carried  out  in  response  to  the  issue 
of  orders  is  not  always  exactly  as  intended, 
it  becomes  part  of  the  administrative  func- 
tion of  Control  to  observe  failures,  study 
their  reasons,  and  set  in  motion  new  orders, 
instruction,  or  training  to  prevent  these  ir- 
regularities from  recurring  as  far  as  is  pos- 
sible. While  these  two  aspects  of  Control 
are  necessarily  quite  distinct,  for  installation 
must  be  complete  before  administration  can 
begin,  nevertheless  it  may  be  convenient  to 


362     SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

consider  both  aspects  together — both  being 
equally  subject  to  the  same  Laws  of  Effort. 

1.  Applying  the  First  Law  of  Effort. 
What  standard  methods  of  control  exist  ?  To 
deal  with  this  question  in  detail  would  re- 
quire a  considerable  volume.  Systems  of 
control  are,  at  present,  the  battle-ground  of 
the  different  schools  of  management,  and 
this  ground  is  occupied  in  force  at  the  pres- 
ent time  by  the  analytical  school,  from  whose 
efforts  has  arisen  (to  give  justice  its  due) 
much  of  the  awakening  that  has  taken  place 
of  late  years-  in  regard  to  the  science  of  man- 
agement. As  the  subject  has,  like  Compari- 
son, a  large  and  increasing  literature  of  its 
own,  at  this  stage  we  can  only  recommend 
its  study  to  those  who  desire  to  accumulate, 
standardize,  and  apply  experience  with  re- 
gard to  it.  For  some  years  to  come,  however, 
it  seems  likely  as  in  the  case  of  Comparison, 
and  for  the  same  reason,  that  the  study  and 
application  of  standard  methods  of  Control 
will  be  the  work  of  the  professional  expert, 
rather  than  of  the  manufacturer  himself. 

2.  Second  Law  of  Effort.  Division,  Co- 
ordination and  Conservation  of  Effort.  In 
regard  to  the  installation  of  Control  we  must 


THE  FUNCTION  OF  CONTROL         363 

first  effect  an  analysis  of  the  various  duties 
to  be  performed,  and  set  up  units,  each  de- 
manding the  simplest  skill  possible.  Each 
duty  should  represent  a  definite  grade  of 
qualification.  Each  duty  should  be  precisely 
defined  so  that  no  ambiguity  exists  as  to  its 
range. 

Secondly,  we  must  carefully  examine  this 
rough  scheme  of  duties  in  the  light  of  Co- 
ordination. Have  they  been  so  arranged  that 
no  "gap  or  overlap "  exists?  No  jurisdic- 
tion should  overlap.  No  man  should  be  ex- 
pected to  serve  two  masters.  The  spheres  of 
duty  must  exactly  join  so  that  no  item  of 
work  is  left  outside,  to  be  performed  by  any- 
body who  thinks  of  it,  or  neglected  because 
someone  thought  someone  else  was  attend- 
ing to  it. 

Again,  the  question  of  co-ordinating 
the  work  of  individuals  by  means  of  com- 
munication must  be  worked  out.  What  duties 
require  that  their  incumbents  should  be  in 
direct  touch  with  each  other!  Where  should 
duties  be  co-ordinated  by  means  of  regular 
"conferences"  or  meetings?  How  far  should 
"  staff "  assistance  (i.  e.,  the  assistance  of 
specialists)  be  available  for  certain  men,  and 
what  degree  of  authority  should  such  staff 


364     SCIENCE   AND   PKACTICE   OF   MANAGEMENT 

members  have? — All  these  will  require  dis- 
cussion and  settlement  after  the  general 
scheme  of  duties  has  been  roughed  out. 
Finally,  each  duty  must  be  considered  in  the 
light  of  conservation — that  is,  each  must  be 
considered  quantitatively.  What  amount  of 
effort  is  involved  in  each  duty?  What  force 
will  be  demanded  to  carry  out  each  kind  of 
work!  This  must  not  be  too  small  nor  too 
great.  Eed  tape  must  be  eliminated  by  care- 
fully scrutinizing  each  duty,  and  observing 
its  actual  necessity,  and  asking  whether  the 
effect  expected  cannot  be  brought  about  in 
some  simpler  way.  Considerable  experience 
with  a  variety  of  control  systems  is  neces- 
sary to  answer  most  of  these  questions  ef- 
fectively. 

So  far  we  have  said  nothing  about  the 
nature  of  the  duties.  We  have  merely  spoken 
of  certain  essential  treatment  of  each  duty, 
whatever  its  nature.  We  have  now  to  con- 
sider the  duties  concretely,  and  this  can  be 
best  done  by  considering  Control  from  the 
administrative  side.  For  it  is  precisely  here 
that  systems  diverge.  In  other  words,  the 
various  duties  performed  by  Control  are  not 
so  very  different  under  old  and  new  systems 
of    management,    but    they    are    differently 


THE    FUNCTION    OF    CONTROL  365 

grouped.  It  is  not  so  much  that  new  duties 
have  been  invented,  but  that  new  relations 
have  been  suggested  for  them.  This  must  be 
discussed  at  some  length. 

No  problem  in  management  requires  ex- 
pert handling  so  urgently  as  this  if,  on  the 
one  hand,  oppressively  complex  systems  of 
control  and,  on  the  other,  loose  methods  in- 
volving friction,  delays,  loss  and  recrimina- 
tions are  to  be  avoided.  It  is  necessary, 
therefore,  to  try  to  see  very  clearly  what 
the  essential  elements  really  are. 

Two  Antagonistic  Elements 

The  problem  owes  its  difficulty  to  its  con- 
taining two  antagonistic  elements,  which 
must  be  reconciled  and  adjusted  to  one  an- 
other in  practice.  We  require  to  exercise 
foresight,  that  is,  settle  matters  in  advance 
of  their  happening.  At  the  same  time  we 
have  to  preserve  flexibility,  so  that  in  the 
event  of  their  not  happening  as  foreseen, 
confusion  and  tangle  will  not  ensue.  This  is, 
of  course,  something  like  the  old  philo- 
sophical problem  of  trying  to  reconcile  Free- 
will with  Predestination,  only  in  our  own 
case  we  are  compelled  to  find  some  working 
solution  of  the  conundrum.    It  is  not  surpris- 


366      SCIENCE   AND    PKACTICE    OF   MANAGEMENT 

ing  that  many  practical  managers,  who  thor- 
oughly understand  both  the  technical  proc- 
esses of  operation  and  the  successful 
handling  of  men,  fail  noticeably  in  maintain- 
ing an  even  and  uninterrupted  stream  of 
work,  rigorously  exact  as  to  date. 

Analysis  of  the  division  of  effort  con- 
cerned in  the  control  of  work  in  progress 
shows  that  it  runs  in  three  streams — (1) 
Supply  and  Movement  of  Material,  (2)  Sup- 
ply and  Movement  of  Instructions,  (3)  Ac- 
tual Operation.  The  co-ordination  of  these 
three  streams  is  often  somewhat  complex. 

The  first  and  most  obvious  co-ordination 
is  indicated  by  the  fact  that  operation  can- 
not take  place  until  both  material  and  in- 
structions have  met  at  the  machine.  The 
second  co-ordination  is  that  of  time, — opera- 
tions must  be  carried  out  in  a  predetermined 
sequence,  so  that  successive  stages  of  manu- 
facture shall  be  reached  by  definite  dates. 
This  implies  that  material  must  flow  or  cir- 
culate on  some  basis  of  priority. 

Expanding  the  analysis  of  the  division  of 
effort  just  made,  it  is  observable  that  in  the 
journey  from  raw  material  to  finished  stock, 
the  fewest  possible  stages  will  be  the  follow- 
ing.   The  material  must  be : — 


THE   FUNCTION    OF    CONTROL  367 

(1)  Purchased. 

(2)  Delivered. 

(3)  Held  in  stores. 

(4)  Issued  to  shops. 

(5)  Circulated  from  machine  to  machine. 

(6)  Operated  on  at  each  machine. 

(7)  Inspected. 

(8)  Assembled  or  passed  to  stock. 
Instructions     must    reach    the     different 

points  at  which  material  is  handled  in  ad- 
vance of  or  promptly  at  the  moment  when 
it  is  ready  for  the  next  movement. 

These  movements  must  not  take  place  in 
haphazard  order,  but  with  a  regular  and  pre- 
determined priority,  in  many  cases  with 
strict  adherence  to  a  predetermined  schedule 
of  dates. 

The  co-ordination  of  these  different  classes 
of  effort  must  be  arranged  in  such  a  man- 
ner that  changes  in  plan,  cancellation  or  urg- 
ing forward  of  orders,  spoilt  work,  and  the 
innumerable  troubles  of  every-day  factory 
experience  are  easily  and  instantly  re- 
sponded to  by  the  persons  concerned,  with- 
out the  "system"  getting  into  tangles  or  re- 
quiring heroic  struggles  to  get  the  paper  part 
of  it  back  into  correspondence  with  the  phys- 
ical facts. 


368      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

We  must  avoid  an  inflexible  routine  as  we 
would  the  plague,  while  keeping  the  principle 
of  foresight  and  pre-arrangement  well  to  the 
front.  It  is  therefore  desirable  to  examine 
the  question  of  instructions  and  so  ascertain 
which  things  can  be  settled  by  the  exercise  of 
forethought  without  committing  ourselves 
thereby  to  a  rigid  chain  of  consequences 
which  will  hang  around  our  necks  like  a  mill- 
stone if  the  unexpected  happens,  as  it  surely 
will  sometime  or  other. 

Fixed  Elements 

Certain  things  are  necessarily  specified  in 
advance  and  are  so  fundamental  that  if 
changed  it  may  be  said  that  a  new  piece  will 
result.    These  are : 

(1)  Design,  or  the  shape  and  size  of  the 
piece. 

(2)  Nature  of  the  material. 

(3)  Dimensions,  limits  and  fits. 

These  are  the  usual  instructions  given  on 
the  shop  drawing,  and  modern  practice  de- 
mands that  each  piece  shall  have  its  sep- 
arate individual  drawing.  These  items  of  in- 
struction are  so  bound  up  with  the  produc- 
tion of  one  particular  piece  and  no  other 
that  there  is  no  option  but  to  make  them  the 


THE   FUNCTION   OF   CONTROL  369 

subject  of  forethought.  As  far  as  the  shop 
is  concerned  these  instructions  are  unchange- 
able, since  to  depart  from  them  would  be 
to  produce  something  else  than  that  speci- 
fied. 

As  has  been  discussed  in  the  chapter  on 
Design,  certain  special  tools  may  be  consid- 
ered part  and  parcel  of  the  individual  de- 
sign.   We  thus  add: — 

(4)  Special  jigs  and  tools  for  the  job. 
Up  to  this  point  there  is  no  infringement 

of  the  principle  of  flexibility.  If,  however, 
we  carry  the  principle  of  forethought  any 
further  we  do  begin  to  limit  possible  varia- 
tions of  working,  thus: — 

(5)  Statement  of  the  successive  proc- 
esses, indicating  the  machine,  or  at  least  the 
type  of  machine,  on  which  the  work  is  to 
be  done. 

(6)  Date  at  which  each  stage  of  operation 
should  be  reached. 

Further,  if  we  have  adopted  any  of  the 
numerous  systems  of  payment  by  results,  we 
have  to  add : — 

(7)  Time  allowance  for  each  process,  and 
for  setting  in  each  case. 

In  these  last  three  instructions  we  have 
obviously  begun  to  interfere  with  the  auto- 


370     SCIENCE  AND   PEACTICE   OF   MANAGEMENT 

nomy  of  the  shop,  and  to  that  extent  have  in- 
troduced a  certain  rigidity  of  routine.  We 
have  now  to  discuss  the  question — Is  this  in- 
terference good,  or  bad! 

All  discussions  on  the  subject  must  assume 
one  thing,  namely,  that  the  decision  can  be 
made  in  advance  by  someone  ivho  is  as  fully 
qualified  or  more  qualified  than  the  foreman 
to  make  the  decision.  All  the  systems  em- 
ploying elaborate  planning,  routing  and  des- 
patching departments  have  this  as  their 
weakest  point.  If  an  initial  error  of  judg- 
ment is  made  it  is  woven  into  the  system. 
To  rectify  it  means  trouble  all  along  the  line. 
Calling  the  way  selected  by  the  planning  man 
"the  one  best  way"  is  of  course  very  natural, 
but  humanly  speaking  it  is  very  likely  to  be 
untrue  because  only  in  very  simple  problems 
indeed  is  there  "one  best  way". 

The  disadvantage  may  be  looked  at  first. 
In  the  case  of  a  really  difficult  piece  of  work 
the  chances  seem  in  favor  of  the  man  in  the 
shop  who  is  actually  in  physical  contact  with 
the  job.  Again  the  foreman  bossing  the  work 
is  more  likely  to  have  his  heart  in  the  busi- 
ness if  he  is  doing  it  in  his  own  way.  Thirdly, 
flexibility  is  at  a  maximum, — nothing  is  up- 
set by  the  job  being  done  in  this  way  or  that. 


the  function  of  control  371 

Advantages  of  Habit 

Now  the  other  side  of  the  question.  In  a 
manufacturing  business  —  where  the  same 
piece  is  going  to  be  made  over  and  over 
again,  month  in  and  month  out — a  standard 
way  of  making  possesses  very  great  advan- 
tages. We  establish  habit.  Habit  breeds 
skill  and  speed,  and  promotes  clock-like 
working.  A  change  of  method  after  it  has 
once  become  habit  should  be  ventured  on  only 
when  the  advantages  to  be  gained  are  very 
obvious  indeed. 

The  advantages  of  habit  being  admittedly 
great,  it  is  important  to  set  it  going  in  the 
right  groove,  or  as  near  the  right  groove  as 
after  careful  consideration  seems  possible. 
This  means  that  a  specified  way  of  process- 
ing should  be  made  part  and  parcel  of  the 
design,  and  be  as  intimately  connected  with 
the  piece  as  its  physical  shape. 

This  is,  however,  very  far  from  being  a 
matter  of  hasty  decision  by  any  one  person, 
however  fertile  in  inventing  "best  ways' '  he 
may  be.  It  means  co-operation  between  the 
designer,  the  draftsman,  and  someone  with 
the  highest  degree  of  practical  skill  avail- 
able.   In  many  plants  that  someone  is  likely 


372     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

enough  to  be  the  foreman  himself,  or  even 
a  departmental  foreman,  a  specialist  in  mill- 
ing or  grinding. 

This  brings  us  back  to  the  point  that  the 
designing  of  work  ought  not  to  be  divorced 
from  machining  considerations,  but  should 
proceed  hand  in  hand  with  them.  There 
seems  no  escape  from  this  position.  To  do 
otherwise  is  almost  inevitably  to  get  away 
from  the  closest  line  of  profit. 

In  general  engineering  plants,  where 
things  are  made  perhaps  once  only  and  not 
manufactured,  specification  of  the  machine 
processes  in  advance,  instead  of  in  physical 
presence  of  the  work,  is  much  more  danger- 
ous. It  seems  more  debatable  to  employ  two 
highly  skilled  men  (for  we  should  assume 
that  the  foreman  is  necessarily  the  most  com- 
petent), one  to  specify  what  the  other  is  to 
do.  In  the  present  discussion,  however,  we 
are  treating  of  manufacturing  plants  as  rep- 
resenting the  prevailing  form  of  industry. 

If  the  decision  is  wisely  and  carefully  made 
— and  the  "if "  is  the  kernel  of  the  problem — 
the  practice  of  specifying  in  advance  both 
the  process  and  the  machine  presents  great 
advantages.  We  have  sacrificed  a  little  flexi- 
bility but  we  have  gained  a  standard  way 


THE  FUNCTION  OF  CONTROL         373 

of  working  which,  if  not  the  only  one,  yet 
must  be  considered  as  good  as  any  other, 
from  the  careful  way  in  which  it  has  been 
arrived  at.  From  this  follow  several  devel- 
opments. 

Specification  in  Advance 

First,  the  problem  of  setting,  and  the 
tackle  required  in  connection  with  the  par- 
ticular machine,  can  be  investigated.  This 
tackle  becomes  an  integral  part  of  the  job, 
and  takes  its  place  on  the  "Book  of  the 
Plant",  if  new.  Whether  new  or  not,  it  is  in- 
dicated on  the  drawing.  By  "tackle"  is 
meant  any  holding  device,  which  may  vary  all 
the  way  from  a  complex  jig  to  a  bolt-and- 
clamp. 

Secondly,  the  time  that  should  be  taken 
to  do  the  job  can  be  studied  in  relation  to 
the  particular  machine,  and  the  particular 
tackle  provided.  This  time  should  be  sep- 
arated into  setting  and  machining  time,  and 
on  the  lines  indicated  in  the  second  article, 
compared  by  area  with  other  working  time 
on  that  machine,  and  by  ratio  with  other 
setting  time.  This  will  serve  as  a  verifica- 
tion, or  at  least  a  means  of  checking  the  re- 
sults arrived  at. 


374     SCIENCE   AXD   PRACTICE   OF    MANAGEMENT 

Thirdly,  this  time  of  operation  during 
which  the  job  is  occupying  the  machine  being 
known,  we  can  do  what  in  some  plants  would 
be  very  important,  namely,  ascertain  the 
"loading"  of  our  machines,  so  as  to  know 
for  considerable  periods  in  advance  what 
jobs  would  be  reached  by  them,  and  so  con- 
trol promise  of  deliveries. 

One  other  question  remains,  and  it  is  a 
difficult  one.  We  have  gone  so  far  as  to 
specify  a  number  of  things  in  advance :  di- 
mensions, material,  tools,  processes,  ma- 
chines and  jigs  or  tackle,  setting  time  and 
machining  time.  How  much  farther  should 
we  carry  the  process  of  specification? 
Should  we  specify  every  motion  of  the  man, 
or  should  we  not? 

"We  have  discussed  this  question  briefly  in 
Chapter  IX,  under  the  head  of  " Habit". 
Generally  speaking,  motion  study  is  valuable 
when  it  tends  to  the  setting  up  of  new  and 
better  habit.  If  a  part  has  to  be  made  a 
million  times,  it  is  obviously  of  great  im- 
portance that  the  very  shortest  way  of  doing 
so,  involving  the  least  effort,  should  be  em- 
ployed. Having  discovered  this  "best  way", 
the  next  thing  to  do  is  to  impart  it  to  the 
operative  so  that  he  will  discard  his  old  way 


THE   FUNCTION    OF    CONTROL  375 

or  habit  of  doing  the  work,  and  fall  into  the 
new  and  more  efficient  habit.  This  seems 
the  touchstone  by  which  we  must  test  the  em- 
ployment of  the  somewhat  expensive  method 
of  analysis  called  motion  study.  Is  new 
habit  to  be  formed?  If  so,  then  it  is  merely 
balancing  the  cost  of  the  motion  study 
against  the  gain  expected  from  this  new 
habit  becoming  standard.  If  the  circum- 
stances are  such,  as  from  the  rarity  of  the 
work,  that  no  new  habit  will  be  formed,  then 
motion  study  seems  superfluous. 

As  pointed  out  in  Chapter  XV,  in  many 
industries  the  place  at  which  motion  study 
should  be  applied  is  not  the  product  but  the 
machine.  Where  machines  are  limited  in 
range,  and  it  is  possible  by  motion  study  to 
set  up  new  and  better  habits  of  operation, 
then  its  value  cannot  be  over-estimated.  Ev- 
ery such  application  is  a  clear  gain.  But  in 
industries  such  as  machine  shops,  where  ma- 
chines are  " general"  in  range,  then  it  be- 
comes a  question  of  either  raising  the  stand- 
ard of  the  whole  business  of  operating  ma- 
chines, by  careful  analysis  of  all  their  pe- 
culiarities, and  then  training  men  in  new 
ways  of  operation,  or  on  the  other  hand,  con- 
fining oneself  to  carrying  out  this  form  of 


376     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

analysis  on  the  components  themselves,  and 
this  last  way  can  be  profitable  only  when  it 
can  be  translated  into  new  habit. 

Thus  far  our  arrangements  have  not  led 
us  into  any  very  complex  interaction  of 
wheels  and  teeth.  What  we  have  considered 
advisable  is  really  a  case  of  "knowing  all 
about  the  job"  as  we  found  in  Chapter  XV 
that  it  was  desirable  to  know  "all  about  the 
machine".  We  have  simply  embodied  our 
ideas  about  the  suitable  method  of  doing  the 
job  alongside  our  ideas  of  the  shape  and  di- 
mensions of  the  job.  We  have  lost  flexibility 
to  the  extent  that  we  have  selected  one  type 
of  machine,  or  in  some  cases  one  individual 
machine  out  of  many,  but  if  as  an  exceptional 
case  it  were  found  indispensable  to  do  the 
job  on  another  machine,  nothing  would  be 
disjointed  except  possibly  the  time  allow- 
ance. 

The  problem  of  GO-ordination  is  of  course 
simplified  in  proportion  as  we  lay  our  plans 
in  advance,  and  limit  the  possible  variations 
that  may  take  place  at  the  various  stages  of 
the  work  as  it  progresses.  But  the  disturb- 
ance arising  from  such  variations  if  they  do 
happen  after  all  is  materially  increased.  The 
game  of  chess,  with  its  pieces  moving  in  vari- 


THE    FUNCTION    OF    CONTROL  377 

ous  but  strictly  limited  ways  is  the  most  per- 
fect example  of  co-ordination  that  exists. 
But  in  a  game  of  chess,  if  we  displace  a  piece 
the  whole  game  is  ruined.  Many  plants  are 
burdened  with  systems  arranged  on  the  prin- 
ciples of  chess. 

Organization  on  the  chess  principle  must 
be  avoided  at  all  hazards.  Each  stream  of 
movements  should  be  free  and  independent, 
and  co-ordination  based  on  the  physical  ar- 
rival and  presence  of  the  material  at  stage 
after  stage.  In  view  of  some  of  the  elab- 
orate (and  expensive)  planning  systems  that 
are  frequently  talked  of,  this  conclusion  may 
seem  to  some  people  somewhat  reactionary, 
but  I  believe  that,  whatever  its  theoretical 
poverty,  it  represents  the  only  sound  prac- 
tice. It  is  not  what  should  happen,  but  what 
does  happen,  that  is  the  safe  guide  as  to  what 
is  to  happen  next. 

Co-OEDINATING   MATERIALS 

Co-ordination  of  the  streams  of  material 
is,  as  already  mentioned,  of  two  kinds, 
namely,  as  to  place  and  as  to  time.  In  other 
words,  we  are  constantly  seeking  answer  to 
the  two  questions— "Where  is  it  now?'9  and 
"When  will  it  be  ready  f9' 


378     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

The  answer  to  the  first  question  is  mainly 
a  matter  of  good  bookkeeping.  Methods  of 
keeping  costs  are  almost  as  numerous  as 
days  of  the  year,  but  no  system  can  be  con- 
sidered as  satisfactory  that,  while  serving 
its  main  purpose  of  recording  the  cost  of 
each  process  on  each  part,  does  not  also  serve 
the  purpose  of  indicating,  graphically  and 
exactly,  how  far  each  item  of  an  order  has 
progressed,  and  thus  locate  the  position  of 
every  casting,  forging  or  piece  being  worked 
on  in  the  shops.  With  this  information 
placed  on  an  accurate  and  prompt  basis,  the 
problem  of  co-ordination  is  greatly  simpli- 
fied. 

The  answer  to  the  second  question,  "When 
will  it  be  ready?"  is  not  so  easily  arrived 
at.  The  time  taken  by  a  component  to  get 
itself  made  is  obviously  not  merely  a  sum 
total  of  the  setting  and  operation  times  of 
its  processes.  In  every  shop  there  will  be 
an  average  time  taken  for  the  "circulation" 
of  pieces,  depending  on  the  number  of  proc- 
esses they  have  to  go  through,  quite  apart 
from  the  machining  time,  corresponding  to 
the  average  time  of  a  train,  which  includes 
stops,  delays,  time  at  depots,  etc.,  in  addi- 
tion to  actual  running  time. 


THE    FUNCTION    OF    CONTROL  379 

The  usual  practice  is  to  fix  a  delivery  date 
for  the  completed  job  on  the  assumption  that 
everyone  concerned  will  keep  it  in  mind.  But 
where  a  proper  cost  system,  arranged  for 
locating  parts,  is  in  use  it  is  probable  that 
the  best  practical  way  to  control  the  flow  of 
work  according  to  dates  is  by  fixing  an  aver- 
age time  depending  on  the  actual  circum- 
stances of  the  shop,  for  each  successive  stage 
of  operation,  and  dating  the  job  itself  at  the 
day  of  starting  it,  so  that  every  one  that 
meets  it  knows  whether  the  piece  he  is  actu- 
ally working  on  is  already  delayed  or  not. 
Then  keep  a  ivatch  on  the  exceptions,  on 
pieces  which  are  notoriously  behind  time. 

If,  for  instance,  a  piece  has  arrived  at  a 
stage  that  it  should  have  reached  in  four 
days,  and  it  does  not  get  there  till  seven 
days  have  elapsed,  tKat  job  calls  aloud  for 
help.  It  enlists  the  good-will  of  everyone  to 
push  it  along.  This  association  is  better  than 
the  usual  association  with  a  future  date  of 
delivery  for  the  whole  job,  because  in  the  lat- 
ter case  human  nature  is  very  apt  to  leave 
it  to  the  other  fellow  to  make  up  the  lost 
time.  It  is  easier  to  recognize  the  fact  that 
a  piece  is  late,  than  that  it  will  be  late 
farther  on  in  the  chain  of  operations. 


380     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

These  two  questions  are  present  in  every 
shop,  however  simple  or  complex  its  degree 
of  organization.  Successful  answers  to  them 
must  precede  any  attempt  to  realize  a  high 
degree  of  co-ordination.  It  is  the  imperfect 
answers  to  these  questions  that  the  ordinary 
shop  is  alone  able  to  furnish  that  render  com- 
plex systems  attractive,  if  they  appear  to 
promise  such  answers. 

We  have  now  to  consider  co-ordination 
proper,  that  is,  the  setting  in  motion  of  the 
streams  which  shall  afterwards  meet  to- 
gether in  due  time  and  place,  and  so  realize 
the  programme.  In  this  as  in  other  things 
to  start  right  is  half  the  battle.  Consequently 
the  provision  of  material,  including  in  that 
term  the  accessory  tools  which  will  be  re- 
quired in  dimensioning  the  piece,  will  be  the 
first  consideration.  -  , 

Certain  elements  of  the  circulation  or 
"flow"  of  the  material  (and  therefore  the 
work)  may  be  enumerated.  These  will  be 
put  into  the  shape  of  responsibilities : 

(1)  Some  one  must  be  responsible  for  see- 
ing that  the  material  is  in  stock  or,  alterna- 
tively, ordering  it. 

(2)  Some  one  must  be  responsible  for 
drawing  the  material  out  of  stock  and  get- 


THE    FUNCTION    OF    CONTROL  381 

ting    it    to    the    place    where    it    is    to    be 
worked  on. 

(3)  Some  one  must  see  that  the  operation 
takes  place  and  is  satisfactory,  and  that  jobs 
are  handled  in  order  of  urgency.  Inspection 
is  frequently  a  separate  responsibility,  but 
not  always. 

(4)  Some  one  must  see  that  the  job  is 
passed  on  to  the  next  place  of  operation 
without  delay.  If  the  piece  is  finished  it  will 
go  for  final  inspection  to  stock  or  to  assem- 
bly room,  as  the  case  may  be. 

These  four  elements  represent  the  mini- 
mum routine.  In  addition  there  should  or- 
dinarily be : 

(5)  Some  one  to  attend  and  inquire  into 
the  "exceptions,"  namely,  those  jobs  which 
are  not  coming  forward  in  due  time,  or  to 
which  accidents  have  happened. 

Desirable  conditions  are  (a)  as  few  pieces 
of  paper  as  possible,  and  (b)  as  little  inter- 
locking of  future  effort  as  possible. 

It  is  not  the  object  of  this  article  to  indi- 
cate definite  ways  of  doing  any  of  these 
things,  but  to  show  the  underlying  principles 
and  conditions  that  must  be  observed  in  any 
successful  solution.  It  will  be  obvious,  for 
instance,  that  that  kind  of  system  sometimes 


382     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

known  as  the  "way-bill"  in  which  the  order 
accompanies  the  job  throughout  its  progress, 
or  the  "engineering"  method  in  which  in- 
structions are  sent  simultaneously  to  all  con- 
cerned, equally  fall  within  the  conditions 
specified.  Neither  of  these  is  a  "best  way", 
in  the  abstract.  Similarly  no  specific  ar- 
rangement for  the  co-ordination  of  responsi- 
bilities is  a  "best  way"  except  for  the  special 
case  it  has  been  adapted  to.  It  is  much  more 
important  to  understand  exactly  what  are 
the  elementary  conditions  than  to  attempt 
the  determination  and  fixation  of  construc- 
tional details  which  would  have  no  universal 
application. 

Prompt  provision  of  the  material  (element 
1),  is  not  the  simple  thing  it  looks.  It  im- 
plies the  keeping  of  an  adequate  stock  of 
material  adequately  catalogued,  of  course, 
but  it  also  demands  a  higher  efficiency  in  the 
purchasing  department  than  is  frequently 
realized  in  moderate-sized  plants.  An  elab- 
orate system  of  requisitions,  orders-in- 
triplicate  and  so  forth,  in  charge  of  a  bright 
hustling  junior  do  not  make  a  purchasing  de- 
partment. There  is  no  place  where  special- 
ized experience  can  make  itself  felt  more  use- 
fully. 


THE    FUNCTION    OF    CONTROL  383 

The  prime  object  of  a  purchasing-store- 
keeping  organization  is  to  provide  material 
when  required.  Its  second  object  should  be 
to  keep  down  the  amount  of  capital  locked  up 
in  material.  The  end  to  be  attained  as  in- 
dicated by  the  principle  of  conservation  of 
effort,  is  not  an  accumulation  but  a  flow  of 
material.  The  cheapest  place  to  store  ma- 
terial is  in  the  supplying  firm's  warehouse, 
and  a  competent  purchasing  agent  will  set 
himself  to  discover  and  cultivate  relations 
with  those  firms  who  can  be  fully  depended 
upon  for  deliveries  at  short  notice  and  faith- 
ful performance  of  promises,  rather  than 
lock  up  large  capital  unnecessarily. 

No  question  of  co-ordination  or  of  inter- 
ference with  flexibility  arises  at  this  point. 
Whether  the  material  is  checked  off  from  a 
"bill  of  material"  or  from  the  individual 
drawing  as  it  is  issued,  its  place  of  departure 
is  the  same,  namely,  the  stores.  All  that  is 
done  at  this  stage  is  to  insure  that  it  is  or 
will  be  there  when  wanted. 

Movements  or  Wobk 

The  next  element  (2)  is,  however,  a  point 
of  departure  at  which  different  systems  di- 
verge.    How  shall  it  be  passed  from  stores 


384     SCIENCE    AND    PRACTICE    OF    MANAGEMENT 

to  the  first  machining  center!  Shall  it  be,  so 
to  speak,  "left  till  called  for"  or  shall  it 
be  delivered  automatically  whether  it  is 
wanted  at  that  precise  moment  or  not?  As 
element  4,  referring  to  the  subsequent  move- 
ments of  the  job  between  machines,  involves 
the  same  class  of  problem,  some  discussion 
may  be  devoted  to  both  of  them  at  this  point. 
The  whole  question  of  "despatching,"  or 
nearly  the  whole  of  it,  is  in  fact  involved 
here. 

It  is  sometimes  supposed  that  "despatch- 
ing" owes  its  origin  to  one  or  other  of  the 
schools  of  "scientific"  management.  This  is 
by  no  means  the  case.  As  far  back  as  1898 
the  writer  made  use  of  bins  or  racks  in  which 
each  machine's  jobs  were  arranged  in  se- 
quence, together  with  graphic  methods  of 
showing  the  progress  of  every  process  on 
every  part  of  each  job  in  a  large  machine 
shop.  There  was  no  great  novelty  in  the 
idea  even  then.  Much  of  the  subsequent  prog- 
ress has  been  in  the  wrong  direction,  namely, 
in  decreasing  flexibility  and  imparting  rigid- 
ity to  methods  of  despatching  beyond  the 
needs  of  the  case. 

Material  does  not  move  of  itself.  There- 
fore it  is  obvious  that  instructions  must  be 


THE   FUNCTION"   OF    CONTROL  385 

issued,  by  someone  and  to  someone,  before  it 
will  get  transferred  stage  by  stage  in  its 
journey.  These  instructions  may  be  verbal 
or  written ;  they  may  be  based  on  the  actual 
need  of  the  moment,  or  be  part  of  a  pre- 
arranged plan.  The  method  of  solving  the 
problem  may  be  all  the  way  from  very  simple 
to  very  complex,  but  again  it  is  hard  to  dis- 
cover that  there  is  any  "best  way'\ 

In  some  plants,  where  the  product  is  con- 
stant, the  stages  of  operation  easily  recog- 
nizable, and  the  destination  of  pieces  always 
obvious,  movement  of  work  becomes  habit  or 
tradition,  and  the  duties  of  the  personnel  to- 
wards it  become  automatic  or  sub-conscious. 
This  is  not  only  the  limit  of  simplicity,  it  is 
also  the  limit  of  conservation  of  effort,  and 
therefore  of  cheapness  or  economy.  No  ef- 
fort is  wasted ;  all  that  is  applied  is  applied 
directly  to  moving  material,  and  none  to  red 
tape.  This  happy  condition  cannot  be  real- 
ized in  all  plants,  nor  in  any  plant  where  the 
product  is  not  uniform  and  invariable. 

Generally  speaking,  however,  the  nearer 
we  keep  to  making  the  material  do  its  own 
signalling  or  "despatching",  the  nearer  we 
shall  keep  to  simplicity  and,  above  all,  flexi- 
bility.   That  is  to  say,  the  fact  of  completion 


386     SCIENCE   AND   PRACTICE   OF    MANAGEMENT 

of  a  stage  or  process  should  be  in  itself  the 
signal  for  transfer  of  the  material  to  the  next 
machine  or  production  center.  This,  com- 
bined with  an  adequate  cost  system  which  en- 
ables close  watch  to  be  kept  on  the  progress 
of  work,  will  usually  control  circulation  in  a 
satisfactory  manner. 

As  most  practical  men  are  aware,  the  core 
of  the  trouble  in  many  shops  is  not  so  much 
making  a  choice  among  several  "waiting" 
jobs,  as  to  get  the  knowledge  of  the  physical 
arrival  of  the  material  to  the  right  quarter — 
promptly.  In  many  shops  piles  of  work  all 
over  the  floor  make  it  very  easy  for  a  perhaps 
important  job  to  be  overlooked  and  delayed. 
Yet  no  very  elaborate  scheming  in  advance 
is  necessary  to  prevent  this.  Methods  of 
quick  identification  of  the  job  are  necessary, 
and  in  some  plants  this  is  attained  by  ensur- 
ing that  every  casting  and  forging  bears 
identification  marks  so  placed  that  they  will 
not  be  machined  off  till  the  final  process,  or 
not  at  all. 

Where  this  is  done,  and  if  it  is  accom- 
panied by  a  cost- tracing  system  that  tells  the 
story  of  delayed  parts  and  processes  day  by 
day,  control  of  circulation  will  be  sufficient 
to  give  satisfactory  results  on  the  one  hand 


THE    FUNCTION    OF    CONTROL  387 

and  preserve  the  maximum  of  flexibility,  with 
the  minimum  of  red  tape  on  the  other. 

It  will  be  noticed  that  the  method  herein 
advocated,  based  on  the  necessity  for  co- 
ordinating effort  and  the  desirability  of  con- 
serving it,  makes  considerable  use  of  the 
principle  of  exceptions.  Having  made  a 
good  start,  by  providing  first  the  necessary 
instructions,  as  full  as  necessary,  and  the 
necessary  material  ready  for  use,  and  hav- 
ing assigned  certain  dates  by  which  each 
stage  of  manufacture  should  be  completed, 
the  control  of  circulation  of  work  rests  first 
on  adequate  and  prompt  records  of  signifi- 
cant information  coupled  with  a  constant 
scrutiny  to  detect  accidents,  irregularities, 
and  things  not  happening  according  to  pro- 
gramme. When  these  are  detected  they  are 
made  the  subject  of  personal  investigation 
by  someone  detailed  for  that  purpose. 

The  theory  underlying  this  arrangement  is 
based  on  the  practical  fact  that  though  it  is 
possible  to  plan  very  definitely  in  advance, 
it  is  impossible  to  foresee  accidents  and  ex- 
ceptions. When  these  happen  they  must  be 
set  right  by  personal  effort  and  by  no  other 
means.  Therefore  it  is  better  to  recognize 
this    from   the    start,    confine    the    forward 


388     SCIENCE   AND    PEACTICE    OF    MANAGEMENT 

planning  to  those  elements  which  are  either 
not  subject  to  change,  or  to  those  in  which 
change  will  not  be  a  serions  matter,  and  then 
scrutinize  what  does  happen  carefully  and 
completely.  Where  matters  are  not  going 
right,  swift  personal  attention  from  someone 
in  close  touch  with  the  Aoav  of  the  work  gives 
the  best  chance  of  ultimate  success.  It  will 
be  understood  that  the  satisfactory  working 
of  this  method  depends  upon  the  promptness 
and  accuracy  with  which  the  actual  happen- 
ings in  the  shop  are  recorded,  and  their 
grouping  and  marshalling  in  a  form  indi- 
cating things  demanding  attention. 

Law  of  Efficient  Plow 

In  considering  the  question  of  the  flow  or 
stream  of  work,  with  a  view  to  comparing 
the  efficiency  obtaining  in  any  particular 
plant,  it  is  well  to  keep  in  mind  the  condi- 
tions at  which  this  flow  achieves  maximum 
efficiency.  Maximum  efficiency  as  regards 
flaw  is  achieved  when  each  machine  in  the 
plant  is  continuously  engaged  in  producing 
one  single  component  of  the  product,  the  out- 
put of  the  various  machines  being  so  propor- 
tioned that  all  the  components  turned  out  in 
the  shop  are  assembled  as  fast  as  they  are 


THE  .  FUNCTION    OF    CONTROL  389 

produced ;  also  where  the  supply  of  raw  ma- 
terial is  so  provided  for  that  the  quantity  of 
raw  material  carried  in  stock  is  not  more 
than  absolutely  necessary  to  prevent  short- 
age which  would  stop  the  stream  of  produc- 
tion. Further,  on  the  commercial  side  the 
flow  of  work  is  at  its  best  when  the  manu- 
factured and  assembled  product  is  sold  and 
delivered  as  fast  as  it  leaves  the  shop. 

These  conditions  can  rarely  be  realized  in 
the  kinds  of  business  that  approximate  to  the 
"engineering"  type,  but  for  any  type  of  busi- 
ness they  represent  what  would  be  the  high- 
est efficiency — because  the  quickest  turning 
over  of  capital— could  they  be  realized.  The 
nearer  any  business  can  approach  these  ideal 
conditions  the  nearer  it  will  be  to  absolute 
efficiency,  regarded  from  the  point  of  view 
of  the  flow  of  work.  Properly  regarded  these 
conditions  become  a  measuring  rule  by  which 
to  compare  the  actual  conditions  in  a  plant. 
Some  of  them  will  be  seen  at  once  to  be  im- 
possible of  attainment  owing  to  the  nature 
of  the  work,  but  the  most  skilful  organizer 
will  be  he  who  gets  with  the  means  at  his 
disposal  the  nearest  approximation  to  this 
continuous  stream  of  production  that  his  con- 
ditions will  allow. 


390    science  and  practice  of  management 

Be  capitulation 

There  are  two  elements  in  the  control  of 
work — desirability  of  exercising  foresight, 
and  necessity  for  preserving  flexibility, 
which  are  antagonistic.  Solutions  must  be  a 
matter  of  compromise. 

Certain  elements  of  jobs  are  necessarily 
fixed  and  unchangeable,  others  are  subject 
to  exigencies  as  they  arise.  The  latter 
should  be  brought  under  regular  routine, 
provided  the  nature  of  the  work  permits, 
and  only  as  far  as  it  permits. 

The  object  of  motion  study  is  to  form  new 
habit.  Consequently  it  will  pay  to  study 
thoroughly  all  product  that  is  to  be  made 
over  and  over  again  with  a  view  to  deter- 
mining the  best  routine  for  it,  where  it  would 
not  pay  to  apply  the  same  methods  to  occa- 
sional work  for  which  there  is  no  regular  de- 
mand. It  will  pay  best  where  it  can  be  ap- 
plied to  the  machine  rather  than  to  the  indi- 
vidual items  of  product. 

Most  of  the  opportunities  for  exercising 
foresight  could  be  most  usefully  seized  in 
connection  with  the  original  design  or  draft- 
ing of  the  component.  Designing  should  not 
be  divorced  from  machining  considerations. 

Co-ordination    of   work   in    shops    should 


THE   FUNCTION    OF    CONTROL  391 

be  based  not  on  what  should  happen  but  on 
what  does  happen.  The  latter  is  the  only 
safe  guide  to  determine  what  should  happen 
next. 

Successful  co-ordination  of  work  should  al- 
ways be  able  to  answer  the  questions  — 
" Where  is  it  now!"  and  "When  will  it  be 
ready?" 

The  elements  of  the  flow  or  stream  of  work 
can  be  stated  in  the  form  of  five  kinds  of 
responsibility.  Each  of  these  must  be  effi- 
ciently discharged. 

The  conditions  of  maximum  efficiency  in 
regard  to  flow  or  stream  of  work  can  rarely 
be  attained  in  engineering  plants,  but  any 
plant  will  be  proportionately  efficient  in  flow 
as  it  gets  nearer  to  these  conditions. 

3.  Second  Law  of  Effoet  (continued) — 
Remuneration  of  Effort.  Special  reward 
in  regard  to  the  different  departments  of 
Control  has  hardly,  as  yet,  received  any  con- 
sideration. In  the  higher  posts  comprised  in 
this  function,  it  seems  unlikely  that  anything 
but  a  salary  basis  will  be  found  desirable. 
But  the  routine  work  of  store-keepers,  order 
clerks,  tracers,  etc.,  is  another  matter.  It 
does  not  seem  unlikely  that  some  form  of  spe- 
cial remuneration  or  bonus,  based  on  absence 


392      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

of  errors,  delays,  misunderstandings,  and 
forgetfulness  will  eventually  be  brought  into 
use.  The  Control  function  being  divisible 
into  groups,  such  as  those  men  concerned 
with  store-keeping,  with  handling  and  con- 
veying material  and  product,  with  clerical 
work  on  orders,  with  tracing  and  "despatch- 
ing", etc.,  would  seem  to  offer  a  promising 
field  for  the  application  of  some  form  of 
group  incentive,  based  on  smooth  working 
and  absence  of  hitches.  In  this  function, 
also,  premiums  may  be  offered  for  sugges- 
tions leading  to  improvement  in  the  methods, 
and  the  removal  of  observed  hindrances  to 
the  free  circulation  of  material  or  instruc- 
tions. 

Third  Law  of  Effort.  Vocational  fitness 
is  one  of  the  principles  of  the  Third  Law  of 
Effort  that  may  be  regarded  as  of  special  im- 
portance in  Control.  A  number  of  different 
types  of  mentality  will  be  employed,  and 
these  will  of  course  be  more  suitable  for  cer- 
tain work  than  for  other  work.  Some  study 
of  the  qualifications  for  each  post,  in  the 
light  of  the  special  mental  qualities  desir- 
able, such  as  memory,  quick  observation,  dis- 
crimination, etc.,  if  carefully  carried  out  by 
competent  psychologists,  would  lead  to  in- 


THE   FUNCTION   OF    CONTROL  393 

teresting  and  valuable  results.  All  this,  how- 
ever, is  a  matter  for  future  development. 
The  other  principles  of  the  third  law  should 
also  be  applied  to  the  personnel  of  Control, 
but  as  explained  before,  this  law  applies  to 
men  as  individuals,  and  not  in  their  func- 
tional capacity. 


TABLE  XVIII.      PRINCIPAL  APPLICATIONS  OF  ANALYSIS 
IN    REGARD    TO    CONTROL. 

1.  Analysis  of  the  material  situation,  to  deter- 

mine its  requisition,  purchase-ordering,  re- 
ceiving, storing,  handling  or  conveying,  and 
issue  to  shops. 

2.  Analysis  of  the  product  situation,  to  determine 

its  receipts  by  shops,  passage  from  produc- 
tion center  to  production  center,  and  subse- 
quent  delivery  into   stores  or  warehouse. 

3.  Settlement  of  spheres  of  duty,  based  on   (1) 

and   (2). 

4.  Analysis  of  the  customers'  order  situation,  to 

determine  how  they  shall  be  received,  accept- 
ed, delivery  promises  made,  dissected  de- 
partmental, and  passed  to  persons  con- 
cerned. 

5.  Settlement  of  spheres  of  duty  based  on   (4). 

6.  Analysis  of  the  employment  question,  to  de- 

cide on  appointments,  qualifications,  and 
rates  of  wages  or  salaries. 

7.  Determination  of  the  method  to  be  adopted  as 

to  rate  fixing  for  piece-work,  or  bonus  jobs — 
whether  based  on  time  study,  standard  price- 
lists,  or  fixed  by  a  foreman  or  rate-setter. 


394     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 
TABLE  XVIII.      PRINCIPAL  APPLICATIONS  OF  ANALYSIS 

in  regard  to  control  (Continued). 

8.  Settlement  of  spheres  of  duty  based  on   (6) 

and  (7). 

9.  Analysis  of  the  stages  at  which,  in  complex 

industries,    instructions   have   to   meet   ma- 
terial, with  a  view  to  establishing  a  control 
office  or  planning  department  to  co-ordinate 
such  movements. 
10.     Settlement  of  spheres  of  duty  based  on  (9). 


APPENDICES 

I.    The  Labor  Question. 

II.    The  Expense  Burden  in  Eelation  to  Piece 
Work  and  Premium. 

III.  The  Expense  Burden  in  Eelation  to  Bonus. 

IV.  The  Planning  Department. 

V.    Some  Axioms  of  Administration. 


395 


Appendix  I 
THE   LABOE    QUESTION 

/TA  HE  question  of  incentive  as  regards  op- 
A  eration  is  so  important  a  subject,  in- 
cluding as  it  does  what  is  commonly  termed 
the  Labor  Question,  that  it  merits  discus- 
sion at  some  length. 

The  industrial  problem  is,  in  the  main,  a 
dispute  as  to  the  division  of  the  proceeds  of 
industry.  There  are  two  extreme  ways  in 
which  these  proceeds  can  be  divided.  First, 
the  method  largely  in  vogue  at  the  beginning 
of  the  factory  era,  namely,  that  labor 's  share 
is  just  as  much  as  will  barely  keep  it  alive 
and  no  more,  and  that  all  the  rest  belongs 
to  capital.  Second,  the  exact  opposite  of 
this,  namely,  that  capital  shall  only  receive 
just  sufficient  return  to  remunerate  it  for  its 
risk,  and  that  all  the  rest  shall  belong  to 
labor,  including  of  course  both  handwork  and 
brainwork  in  the  term  "labor". 

The  modern  tendency  is   away  from  the 
former  and  towards  the  latter  system  of  di- 
vision. In  one  of  the  largest  and  most  closely 
397 


398     SCIENCE    AND    PRACTICE    OE    MANAGEMENT 

organized  trades  of  the  world — the  British 
cotton  industry — this  kind  of  division  was 
carefully  discussed  and  very  nearly  adopted 
a  few  years  ago.  The  scheme  failed,  not  from 
any  disagreement  in  principle  between  the 
employers'  federation  and  the  men's  union, 
but  because  of  squabbles  as  to  how  the  fig- 
ures were  to  be  arrived  at. 

Two  Aspects  of  the  Question 

It  is  important  to  realize  the  existence  of 
two  entirely  diverse  aspects  of  the  labor 
question.  The  difference  between  them  has 
been  generally  overlooked  by  economists. 
First,  there  is  the  question  how  far  labor  as 
a  body  shall  divide  with  capital  the  proceeds 
of  industry.  On  this  question  the  individual 
members  of  the  labor  body  are  usually  in  ac- 
cord. It  is  to  the  interest  of  each  and  every 
one  that  this  share  —  the  " wages  fund" — 
should  be  as  large  as  possible. 

Then  there  is  the  further  question  how,  out 
of  the  division  allotted  to  or  claimed  by  the 
whole  body  of  labor  as  its  due  share,  the  in- 
dividual worker  shall  benefit  —  whether  he 
shall  be  compelled  to  limit  his  production  to 
suit  the  capacity  of  the  average  or  even  of 
the  least  skilful  men  in  his  trade,  or  whether 


THE   LABOR   QUESTION  399 

he  shall  be  at  liberty  to  exercise  his  skill  to 
the  utmost,  deliver  more  work  than  and  con- 
sequently reap  a  larger  share  of  the  wages 
fund  than  the  average  man,  and  a  consider- 
ably larger  share  than  the  least  skilful.  The 
same  unanimity  between  individual  members 
of  the  labor  body  does  not  exist  on  this  ques- 
tion as  on  the  other.  The  problem  of  the 
worker 's  relations  with  his  fellow- workers  is 
closely  bound  up  with  this  second  question. 
The  interests  of  the  more  skilful  and  the 
less  skilful  are  obviously  not  identical,  and 
in  a  few  cases  are  really  opposed.  "Where 
only  a  limited  amount  of  work  exists,  as  in 
some  subsidiary  trades,  this  opposition  be- 
comes very  marked,  and  various  abusive 
terms  are  applied  to  those  workers  who  de- 
liver more  than  an  average  output,  and  con- 
sequently get  a  larger  share  of  the  wages 
fund  than  the  average  man. 

The  reward  of  the  whole  body  of  labor  is 
controlled  by  the  different  scales  of  pay 
which  use  or  custom  has  set  up  for  differ- 
ent occupations.  These  different  scales  have 
been  worked  out  by  the  slow  process  of  trial 
and  error,  and  particularly  by  the  way  in 
which  the  supply  of  any  given  kind  of  labor 
offers  itself.     In  the  same  trade  they  vary 


400     SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

in  different  localities,  having  in  general  some 
relation  to  the  cost  of  living.  It  will  be  per- 
fectly evident  that  there  is  no  necessary  re- 
lation between  the  wages  thns  current  and 
usual,  and  the  earnings  of  the  capital  that 
employs  such  labor. 

It  will  also  be  evident  that  this  total  share 
of  the  whole  body  of  labor  in  the  proceeds 
of  industry  is  quite  independent  of  any 
method  of  calculating  earnings.  All  bonus 
methods  have  to  take  as  their  starting  point 
the  customary  ivages  in  the  trade,  and  it  is 
precisely  these  customary  wages  that  control 
the  ultimate  division  of  the  proceeds  of  in- 
dustry.* The  British  cotton  trade,  for  ex- 
ample, is  very  largely  based  on  piece  work 
and  on  a  premium  system  referred  to  below 
but  this  does  not  prevent  the  workers  from 
claiming  5  or  10  per  cent  rise  over  the  whole 
price-list  when  trade  is  good,  and  the  em- 
ployers claiming  a  similar  reduction  when 
trade  is  dull.     The  relative  distribution  of 

*  A  curious  instance  of  the  influence  of  the  customary 
wages  of  a  particular  locality  on  piece  prices  is  given  by 
Dr.  Victor  S.  Clark  (Labor  Bulletin  80.  Washington, 
1909).  Speaking  on  the  earnings  of  girls  engaged  in  the 
Birmingham,  England,  industries,  he  says:  "In  all  cases 
piece  prices  are  fixed  by  the  customary  wages  for  women 
in  the  district,  and  the  rates  reduced  or  increased  till  the 
wage  earned  by  piece  work  approximates  to  what  the  girls 
expect  to  get". 


THE   LABOR   QUESTION  401 

proceeds  within  the  trade  remains  as  before, 
and  is  controlled  in  its  distribution  by  the 
piece  prices,  but  the  total  share  of  labor  as  a 
body  rises  and  falls. 

The  difference  between  these  two  aspects 
of  the  division  of  proceeds  will  be  more 
clearly  seen  if  we  regard  the  case  of  a  co- 
operative plant,  in  which  the  workers  are 
the  sole  stockholders.  In  this  case  the  body 
of  labor  gets  all  the  proceeds,  but  the  divi- 
sion within  the  body  of  labor  is  not  neces- 
sarily equal.  It  is  still  determined  by  cus- 
tomary rates  for  each  different  occupation, 
and  piece  work  is  not  even  precluded,  where- 
by men  earning  the  same  customary  rates 
do  more  or  less  of  the  total  work,  and  there- 
fore receive  more  or  less  of  the  total  divisible 
proceeds. 

This  division  is  also  illustrated  by  the  curi- 
ous scheme  proposed  by  the  French  econo- 
mist Yves  Guyot,  who  suggests  that  manu- 
facturers should  contract  directly  with  the 
unions  for  a  certain  quantity  of  production 
at  a  fixed  price.  In  this  case  a  certain  share 
of  the  proceeds  of  production  is  allotted  to  the 
whole  body  of  labor,  and  the  manufacturer 
has  no  concern  with  the  individual's  reward. 
This  is  in  fact  an  approximation  towards  the 


402     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

system  of  those  mediaeval  guilds  under  whose 
rules  no  merchant  could  purchase  labor  of 
an  individual  worker  but  only  labor  embod- 
ied in  product,  under  the  rules  of  produc- 
tion maintained  by  these  guilds. 

Present  Tendencies 

The  only  thing,  it  would  appear,  that  can 
set  this  question  at  rest,  is  the  determination 
of  what  is  a  fair  share  for  capital  to  take. 
That  is  a  far  simpler  problem  than  the  other. 
It  is  the  condition  to  which  industry  seems 
to  be  progressing.  And  certainly  the  great- 
est hope  for  industrial  peace  lies  in  the  frank 
acceptance  by  employers  of  the  principle  that 
in  any  trade  (that  is,  the  trade  at  large,  not 
necessarily  the  individual  business),  the  re- 
ward of  labor  shall  bear  some  proportion  to 
the  total  proceeds  realized.  Various  attempts 
have  been  made  to  give  this  very  modern 
idea  practical  expression.  Sliding  scales  of 
wages,  profit-sharing  schemes,  and  so  forth, 
have  been  tried,  but  with  only  mediocre  suc- 
cess save  in  a  few  instances.  Nevertheless 
the  bringing  in  of  labor  as  a  partner  in  in- 
dustry will  probably  be  realized  before  many 
decades  have  passed. 

It  will  have  been  seen  from  the  foregoing 


THE   LABOR   QUESTION  403 

that  while  the  division  of  the  proceeds  of 
industry  between  capital  and  labor  is  con- 
trolled only  by  customary  rates  of  wages  in 
any  occupation,  the  reward  of  the  individual 
worker  on  the  other  hand,  when  on  piece 
work,  depends  on  whether  or  not  he  delivers 
more  work  in  a  given  time  than  it  is  the  usual 
practice  of  labor  to  deliver  in  such  time.  It 
is  the  general  contention  of  the  employer 
that  he  has  the  right  to  stimulate  the  in- 
dividual and  sf)ur  him  to  increase  his  work 
above  the  average  by  special  rewards  for  so 
doing,  and  it  is  the  general  contention  of  the 
unions  on  the  other  hand  that  he  possesses 
no  natural  right  to  do  so,  and  that  as  a  mat- 
ter of  policy  the  unions  will  not  permit  him 
to  do  so  to  any  greater  extent  than  they  can 
help.  The  setting  of  a  definite  task  has  been 
fought  by  the  unions  under  many  forms  and 
in  many  places  time  after  time,  sometimes 
secretly  and  sometimes  openly,  on  the  ground 
that  speeding  up  is  in  several  ways  wholly 
inimical  in  the  long  run  to  the  interests  of 
the  individual  so  speeded,  and  of  the  body  of 
labor  at  large.  There  are,  however,  notable 
exceptions  to  this  attitude,  which  will  be  re- 
ferred to  later,  as  affording  valuable  practi- 
cal hints. 


404     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

Before  proceeding  to  discuss  task  work, 
however,  it  may  be  pointed  out  that  modern 
methods  of  management  contain  two  distinct 
elements,  between  which  little  distinction  has 
been  drawn  hitherto,  although  this  distinc- 
tion is  of  great  practical  importance. 

These  two  elements  are : — 

(1)  Conserving  effort  by  eliminating 
wastes  and  false  motions  of  various  kinds, 
which  it  is  claimed  exist  in  most  industries. 

(2)  Carefully  measuring ^the  amount  of 
effort  legitimately  entering  into  the  job  and 
remunerating  it  by  some  system  of  task 
work. 

In  industries  which  happen  to  be  conducted 
on  a  high  plane  of  efficiency  already,  it  is 
evident  that  no  fund  for  the  increase  of 
wages  or  of  profits  can  be  extracted  from  the 
first  of  the  above  elements.  In  that  case  the 
only  savings  possible  arise  from  element  (2), 
viz.,  the  stimulation  of  the  worker  to  deliver 
more  than  the  usual  amount  of  work  that  it 
is  his  practice  to  deliver  under  the  customary 
day  wages  of  his  trade.  In  other  words, 
there  is  no  magic  principle  in  any  new 
method  of  management  that  specially  tends 
to  raise  wages  to  a  new  and  higher  level,  ex- 
cept in  so  far  as  the  elimination  of  large 


THE    LABOR    QUESTION  405 

wastes  in  a  plant  may  provide  a  new  fund 
for  this  purpose. 

It  is  important  to  notice  also  that  the  op- 
eration of  element  (1)  is  not  a  continuous 
process.  It  is  based  on  the  assumption  that 
owing  to  the  haphazard  growth  of  industry, 
present-day  manufacturing  practice  is  full  of 
avoidable  wastes.  If,  today,  by  the  elimina- 
tion of  considerable  wastes  in  any  industry 
a  greater  margin  of  profit  were  to  be  created, 
it  is  certainly  open  to  all  concerned  to  divide 
this  "melon"  equitably,  some  of  it  going  to 
labor  in  the  form  of  a  higher  rate  of  wages, 
some  to  capital  in  the  form  of  higher  divi- 
dends, and  some  to  the  consumer  in  the  form 
of  a  lower  price,  but  when  this  has  once  been 
done,  the  future  relations  of  capital  and 
labor  remain  precisely  as  before.  The  ques- 
tion of  their  relative  share  in  the  future  re- 
mains as  in  the  past,  because  no  new  prin- 
ciple tending  to  solve  it  has  been  introduced. 
The  accurate  measurement  of  effort,  by  it- 
self, does  not  of  course  tend  to  raise  wages. 
It  may  even  have  a  contrary  effect. 

Peos  and  Cons  of  Set  Tasks 

The  prejudice  of  unionism  against  set 
tasks  at  a  given  price,  i.  e.,  any  form  of  re- 


406     SCIEXCE   AND    PRACTICE    OF    MANAGEMENT 

numeration  by  results,  whether  based  upon 
accurate  measurement  or  not — is  founded  on 
five  ideas,  viz. : — 

(1)  That  it  takes  away  the  other  man's 
share  of  work. 

(2)  That  it  over-stimulates  the  worker,  to 
his  ultimate  harm. 

(3)  That  it  is  used  as  a  means  of  "weed- 
ing-out",  meaning  the  gradual  elimination  of 
the  average  and  the  less  capable  men  in  the 
trade. 

(4)  That  the  price  of  tasks  always  tends 
to  fall. 

(5)  That  it  leads  to  favoritism. 

On  the  other  hand,  the  employer's  side  of 
the  question  is  founded  on  five  main  con- 
siderations, viz. : — 

(1)  That  time  payment  is  payment  for  a 
vague  and  uncertain  thing. 

(2)  That  task  payment  arouses  the  work- 
er's interest  in  devising  short  cuts  and  in 
cutting  out  unnecessary  wastes. 

(3)  That  task  payment  creates  "self-dis- 
cipline". 

(4)  That  task  payment  enables  the  selec- 
tion of  the  man  most  fitted  for  each  task. 


THE    LABOR    QUESTION  407 

(5)  That  task  payment  lowers  cost  per 
piece  while  increasing  the  individual  work- 
er's earnings  and  the  output  of  the  plant. 

Both  these  statements  are  very  moderate 
and  temperate  abstracts  of  arguments  used 
by  either  side.  It  is  hardly  necessary  to  say 
that  extremists  go  farther,  varying  all  the 
way  from  allegations  on  the  part  of  labor 
that  any  system  of  set  tasks  is  a  deep  laid 
plot  for  the  enslavement  of  the  worker,  to 
allegations  by  "efficiency  experts"  that  they 
would  bring  about  the  millennium  if  it  were 
not  for  the  crabbed  opposition  of  the  men. 

That  both  sides  " agree  to  differ"  on  the 
merits  of  the  question  is  not  wonderful  when 
we  observe  that,  with  one  exception  (and 
even  this  exception  bears  different  interpre- 
tations) none  of  these  assertions  on  the  one 
side  cover  the  same  ground  as  the  assertions 
on  the  other.  The  exception  is  that  the  proc- 
ess called  "weeding-out"  by  the  unions  is 
called  "selecting  the  right  man  for  the  job" 
by  some  employers.  Otherwise  any  of  the 
ten  assertions  may  be  true,  and  perhaps  all 
are  more  or  less  true  today. 

Space  does  not  permit  the  full  discussion 
of  each  one  of  these  ideas,  or  an  examina- 
tion of  its  bearing  on  the  question  of  efficient 


408     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

production.  We  must  address  our  efforts 
mainly  to  an  attempt  to  discover  some  prac- 
tical principle  of  working  that  will  satisfy 
as  many  as  possible  of  the  objections  of 
labor,  while  preserving  as  many  as  possible 
of  the  advantages  claimed  by  the  employer. 
The  first  objection,  viz.,  taking  away  the 
other  man's  share  of  work,  is  not  of  universal 
application.  Whilst  in  some  special  indus- 
tries it  is  unquestionably  true,  it  does  not 
apply  with  any  force  to  others,  e.  g.,  the  en- 
gineering and  metal-working  industries.  In 
these  industries  the  law  that  decreasing  price 
of  an  article  gives  rise  to  increasing  use 
and  demand  is  generally  true.  And  as  a  mat- 
ter of  fact,  this  idea  of  a  fixed  amount  of 
work,  though  still  commonly  met  with,  is  less 
strongly  held  by  engineering  and  metal  work- 
ers than  by  many  other  trades.  We  shall  not 
therefore  go  deeper  into  this  objection  on 
the  present  occasion. 

Eliminating  this  somewhat  old-fashioned 
objection  from  our  discussion,  we  are  left 
face  to  face  with  a  series  of  contentions  and 
objections  that  are  largely  dependent  on  the 
presence  or  absence  of  reasonableness  and 
good  faith  in  the  relations  between  employer 
and  employee. 


the  labor  question  409 

The  Cutting  of  Rates 
It  will  be  noticed  that  the  remaining  ob- 
jections raised  by  labor  are  rather  against 
the  abuses  which  may  arise  (and  it  must  be 
conceded  frequently  do  arise)  from  the 
adoption  of  piece  work,  premium  or  bonus, 
than  against  a  moderate  and  fair  use  of 
the  principle  itself.  It  will  be  readily  ad- 
mitted by  both  sides  that  the  well  marked 
tendency  of  piece  rates  to  fall,  owing  to  price 
cutting,  is  the  really  strong  ground  on  which 
the  objections  of  labor  are  based.  This  prac- 
tice, in  fact,  puts  labor  in  much  the  same  po- 
sition as  regards  definiteness  of  remunera- 
tion as  the  employer  is  in  when  he  pays  for 
labor  on  the  day-work  plan.  Under  these 
methods,  labor  delivers  a  set  amount  of  work, 
but  is  never  sure  that  its  reward  will  con- 
tinue to  be  proportionate  to  the  effort.  Un- 
der day  work  the  employer  is  never  sure  that 
the  efforts  of  labor  will  be  in  proportion  to 
the  customary  wages  paid.  Neither  of  these 
positions  is  satisfactory. 

It  is  claimed  that  certain  premium  and 
bonus  systems  remove  all  temptation  to  the 
employer  to  cut  rates.  This  contention  is 
fallacious,  unless  such  close  determination  of 
time-allowance  has  been  made  that  it  becomes 


410      SCIEXCE    AND    PRACTICE    OF    MANAGEMENT 

impossible  for  men  to  increase  output  greatly 
and  so  earn  excessive  wages  compared  with 
their  customary  wages.  Whether  this  can  be 
actually  done  is  discussed  later  in  this  ar- 
ticle, but  if  it  is  done  such  systems  become 
mere  devices  for  forcing  the  pace,  or  in  the 
words  of  a  prominent  advocate  of  one  of 
these  systems — "One  of  the  objects  of  our 
plan  of  bonus  is  to  fill  the  shop  with  selected 
thoroughbreds"!  Such  an  attitude  will  cer- 
tainly be  fought  by  labor  unions  in  the  fu- 
ture, as  it  has  uniformly  been  in  the  past. 
Instead  of  contributing  to  industrial  peace,  it 
will  sooner  or  later,  when  its  operation  is 
clearly  perceived  by  labor,  tend  to  the  bit- 
terest opposition,  and  a  re-opening  of  the 
whole  question  in  an  acute  form. 

The  fallacy  that  there  is  anything  particu- 
larly new  in  the  various  systems  of  premium 
and  bonus,  either  with  or  without  accurate 
time-study,  cannot  be  too  clearly  understood. 
Though  re-discovered  today,  as  regards  the 
mechanical  industries,  most  of  these  devices 
have  been  experimented  with  since  the  be- 
ginning of  factory  industry.  As  far  back 
as  1835,  a  premium  system,  combined  with 
time  study,  is  described  by  Dr.  Ure  in  these 
words — "The  productive  power  of  his  spin- 


THE   LABOR   QUESTION  411 

ning  machine  is  accurately  measured,  and 
the  rate  of  pay  for  work  done  increases  tvith 
though  not  as  the  increase  of  its  productive 
power".  In  other  words  the  saving  is  di- 
vided between  employer  and  workman  pre- 
cisely as  in  a  modern  premium  system. 
Again,  in  the  British  textile  industry  a  pre- 
mium system  has  been  in  use  for  over  35 
years,  viz.,  since  1876.  In  that  year  what  is 
called  a  " speed  list"  was  adopted.  "Pay- 
ment is  by  result,  calculated  from  a  certain 
standard  of  speed,  viz.,  3  draws  in  50  sec- 
onds; for  each  second  saved  so  much  is 
added  to  the  earnings,  being  one-half  the  ad- 
vantage of  the  difference  arising  from  the 
increased  speed."*  That  is  to  say,  a  50  per 
cent  premium  rate. 

The  ' '  day-and-a-dollar ' '  system  that  led  to 
so  much  trouble  in  the  iron-foundry  industry 
was  another  variety  of  "stimulus,"  differ- 
ing from  other  systems  of  remuneration 
rather  by  its  crudeness  than  in  principle — 
in  short,  there  are  many  varieties  of  calcu- 
lating wages,  and  adjusting  them  to  effort, 
all  of  which  have  failed  at  some  time  or 
other  to  prevent  industrial  trouble.  That  is 
because  whatever  basis  is  fixed,  and  however 

*  ShadweU  's  ' '  Industrial  Efficiency. ' '    P.  393. 


412      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

"scientifically"  it  is  determined,  just  as  soon 
as  men  reach  excessive  earnings,  owing  to 
the  man's  share  of  remuneration  bearing  a 
constantly  increasing  ratio  to  his  day-wages 
(and  this  is  the  case  in  all  existing  systems 
without  exception)  the  employer  will  be 
tempted  to  cut  rates,  and  under  the  stress  of 
severe  economic  pressure,  bad  trade  or  hard 
times,  or  keen  competition,  certainly  will  cut 
them,  all  the  fine  phrases  of  the  inventors  of 
these  schemes  notwithstanding.  None  of 
them  differ  so  much  from  ordinary  straight 
piece  work  that  any  new  principle,  sufficient 
to  overcome  the  employers '  desire  for  self- 
protection,  can  or  does  come  into  operation, 
when  they  are  employed.  A  study  of  their 
curves,  plotted  geometrically,  will  convince 
anyone  who  doubts  the  truth  of  this  state- 
ment.    (See  Appendix  II  and  III.) 

Bealizing  Industrial  Peace 

Industrial  peace,  however,  can  be  realized, 
and  as  a  matter  of  practice  has  been  realized 
over  long  periods  of  time  in  some  trades,  by 
the  adoption  of  certain  principles  of  reason- 
ableness and  mutual  fair  dealing,  about 
which  there  does  not  appear  to  be  anything 
so  peculiar  to  the  special  conditions  obtain- 


THE    LABOR    QUESTION  413 

ing  in  those  industries  that  they  could  not 
be  extended  somewhat  widely.  Though  de- 
pendent on  some  form  of  task  work,  inas- 
much as  some  kind  of  datum  line  or  measure 
of  effort  is  obviously  necessary  before  any 
bargain  can  be  made  about  it,  the  particular 
system  of  remuneration  does  not  greatly  af- 
fect the  result,  if  at  all.  Before  discussing 
specific  instances,  the  general  nature  of  the 
problem  must  be  considered. 

The  purchase  of  labor  at  a  uniform  price 
by  all  employers  in  an  industry  is  as  reason- 
able a  proposition  as  that  there  shall  be  no 
discrimination  in  the  purchase  price  of 
transportation,  provided  that  some  measure 
can  be  found  for  the  corresponding  output 
implied  when  we  speak  of  purchasing  labor. 
In  practice,  however,  both  in  transportation 
and  in  the  case  of  labor,  this  uniformity  is  a 
matter  of  locality,  and  is  not  nation-wide. 

While  it  is  obviously  to  the  interests  of 
labor  that  this  should  be  so,  many  people  fail 
to  see  that  it  is  equally  to  the  interests  of 
the  employer,  particularly  the  better  class  of 
employer.  Yet  that  it  is,  very  brief  consid- 
eration will  show. 

The  prosperity  of  an  industry  depends  on 
the  adjustment  of  its  productive  powers  to 


414      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

the  average  demand  for  its  product.  An  in- 
dustry may,  and  sometimes  does,  consist  of 
one  plant,  but  if  it  contain  more  than  one, 
then  there  will  usually  arise  a  struggle  be- 
tween rival  plants,  one  trying  to  extend  at 
the  expense  of  the  other,  or  at  any  rate  to 
expand  at  a  greater  rate  than  the  other. 
Which  plant  will  grow  will  depend  on  many 
factors,  commercial  skill  being  a  prominent 
one,  cost  of  production  another.  Frequently 
advantages  in  these  directions  average  up. 
One  plant  will  produce  cheaper,  but  the  other 
will  sell  more  cleverly  and  aggressively.  But 
where  commercial  skill  is  about  the  same,  the 
struggle  will  take  place  on  the  arena  of  pro- 
duction. This  struggle  should  be  a  struggle 
of  brains  and  enterprise,  but  too  frequently 
the  victory  is  sought  by  cutting  down  the 
due  and  usual  price  of  labor  to  the  utmost 
that  labor  will  stand. 

This  is  a  process  wholly  destructive,  and 
there  is  hardly  one  single  argument,  either 
economic  or  moral,  that  can  be  used  in  its 
favor.  Suppose  the  original  employer  to  be 
a  man  who  has  gathered  a  contented  body 
of  employees  round  him,  and  created  good 
conditions  for  their  daily  work;  still  there 
will  come  a  day  when,  if  his  competitors  are 


THE    LABOR    QUESTION"  415 

successful  in  cutting  the  price  of  labor,  lie 
will  have  to  follow  suit  or  go  out  of  business. 
Meantime,  by  the  substitution  of  poorly  paid 
and  discontented  labor  for  properly  paid  and 
intelligent  labor,  the  industry  will  suffer,  and 
its  product  will  almost  certainly  become  de- 
graded from  its  former  standards  of  excel- 
lence. The  public  will  be  worse  served  by 
the  products  of  the  industry,  and  it  is  difficult 
to  see  who  has  benefited  at  all.  For  though 
the  originator  of  the  price-cutting  may  reap 
a  temporary  advantage,  still  he  cannot  keep 
it  any  longer  than  it  takes  the  other  employ- 
ers to  follow  suit. 

This  is  no  fancy  picture.  It  has  happened 
over  and  over  again,  and  is  happening  today. 
Its  ultimate  tendency  always  is  to  drive  out 
the  best  class  of  employers  from  a  trade,  and 
the  best  class  of  labor,  and  to  replace  the 
former  by  sweaters,  and  the  latter  by  a  prole- 
tariat amongst  whom  the  wildest  doctrines  of 
social  upheaval  find  their  natural  breeding 
ground.  This  is,  of  course,  most  likely  to 
happen  in  unorganized  industries,  and  those 
not  requiring  much  skill  either  in  administra- 
tion or  labor. 

The  employer  who  undertakes  to  force 
down  the  price  of  labor,  or  allows  his  sub- 


416     SCIENCE   AND   PEACTICE   OF   MANAGEMENT 

ordinates  to  do  so,  is  then  first  of  all  the 
worst  kind  of  enemy  to  his  brother  employ- 
ers, as  well  as  a  bad  citizen.  It  is  to  be  feared 
that  this  point  is  but  imperfectly  appreciated 
by  those  who  have  suffered  from  the  aggres- 
siveness of  unions,  but  a  little  thought  will 
show  that  there  is  no  escape  from  the  truth 
of  the  proposition.  A  further  and  more  im- 
personal effect  is  that  the  purchasing  power 
of  one  section  of  the  people  has  been  re- 
stricted, and  this  restriction  is  felt,  however 
microscopically,  throughout  all  industry. 

Prime  Elements  of  Agreement 

The  fact  is  that  there  are  but  two  elements 
to  the  question  of  the  individual  worker's 
remuneration,  one  of  those  being  an  absolute 
square  deal  between  both  sides,  and  the  sec- 
ond being  adequate  data  to  enable  both  par- 
ties to  perceive  ivhat  a  square  deal  implies. 
The  first  of  those  requirements  is  obviously 
a  matter  not  of  any  kind  of  system  of  man- 
agement or  any  practical  device,  but  of  per- 
sonality alone;  the  second  is  mainly  a  mat- 
ter of  knowledge  of  facts — that  is,  of  a 
method  of  determining  prices  and  of  account- 
ing that  commands  the  confidence  of  both 
sides. 


THE   LABOR   QUESTION  417 

There  are  two  ways  in  which  the  supreme 
influence  of  personality  is  brought  into  play. 
One  is  the  association  of  an  exceptionally 
fair-minded  employer  with  exceptionally 
loyal  men ;  but  this,  though  the  more  obvious, 
is  really  the  less  practical  way  of  securing 
the  good  effects  of  personality,  because  it  is 
largely  a  matter  of  accident  and  cannot  be 
deliberately  planned  for  and  brought  about. 

The  second  and  most  efficient  way  is  to  ap- 
peal to  the  law  of  average.  By  associating 
a  considerable  number  of  employers  with  a 
considerable  number  of  men,  the  idiosyn- 
crasies of  individuals,  the  blusterers  and  the 
malcontents,  tend  to  become  swallowed  up 
and  effaced,  and  a  platform  of  mutual  con- 
fidence on  broad  lines  is  more  easily  erected. 
Large  and  powerful  federations  of  employ- 
ers and  large  and  powerful  unions  acquire  a 
mutual  respect  for  each  other's  powers  of  of- 
fense and  defense  that  leads  to  really  earnest 
efforts  to  preserve  industrial  peace.  The 
larger  the  basis  the  more  likely  that  reason 
will  guide  the  councils  of  either  side.  It  has 
been  remarked  by  Mr.  Carroll  D.  Wright,* 
than  whom  no  one  has  a  better  claim  to  be 
heard  on  the  subject,  that  it  is  the  smaller 

*  See  Eeport  on  Eestriction  of  Output,  1904. 


418     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

and  weaker  unions  who  are  the  most  reason- 
able. 

The  great  engine  of  industrial  peace  is  un- 
questionably that  of  the  standard  price  list, 
varying  only  to  meet  local  scales  of  wages. 
This  is  the  most  satisfactory  protection  to 
the  employer  from  the  rival  who,  knowing 
his  piece  prices,  starts  in  opposition  to  him 
by  commencing  with  lower  prices,  and  it  is 
likewise  an  equal  protection  to  the  man 
against  rate  cutting.  While  it  may  not  be 
possible  to  realize  it  in  all  industries,  there 
are  many  examples  of  its  practical  value  in 
securing  long  periods  of  industrial  peace  and 
what  is  equally  important,  a  calm  discussion 
of  all  points  of  difference  and  dispute.  The 
British  cotton  industry  is  one  of  the  in- 
stances where  this  system  has  been  very  suc- 
cessful in  operation.  The  stove  trade  in  the 
United  States  is  another.  Under  the  treaty 
between  the  Iron-Molders'  Union  and  the 
Stove-Trade  Defense  Association,  made 
twenty-three  years  ago,  and  modified  in  de- 
tail from  time  to  time,  there  has  never  been 
a  strike  on  the  question  of  price — a  truly  re- 
markable record.  These  instances  demon- 
strate the  fact  that  labor's  general  attitude 
of  resistance  to  task  work  can  be  overcome, 


THE    LABOR   QUESTION  419 

not  by  any  special  system,  but  by  adherence 
to  broad  principles  of  mutual  good  faith. 

Trade-Wide  Price  Lists. 

The  careful  determination  of  trade-wide 
price  lists  is,  therefore,  the  first  step  toward 
a.  practical  modus  Vivendi  of  capital  and 
labor,  in  any  industry,  and  several  impor- 
tant points  have  to  be  observed. 

First,  the  determination  of  price  lists  is  a 
matter  entirely  independent  of  the  elimina- 
tion of  wastes.  These  should  be  dealt  with 
on  their  merits,  if  and  where  they  exist. 

Second,  the  influence  of  any  special  system 
out  of  the  many  existing  systems  of  piece 
prices  is  nothing  like  as  important  as  com- 
monly supposed. 

Eegarded  as  a  method  of  remunerating  ef- 
fort, straight  piece  work  is  more  favorable 
to  the  worker  than  any  of  the  later  devices. 
Piece  work  is,  in  fact,  simply  premium  at 
100  per  cent,  whereas  the  ordinary  premium 
rates  are  only  33  per  cent  or  50  per  cent. 
This  is  the  sole  difference  between  the  sys- 
tems. It  is  obviously  better  to  receive  100 
per  cent  of  what  one  saves,  than  only  50  per 
cent. 

Ethically  it  is  also  a  more  attractive  prop- 


420     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

osition  if  we  regard  the  savings  as  due  solely 
to  increased  effort,  whether  mental  or  phys- 
ical, on  the  part  of  the  worker.  But  if  we 
regard  the  saving  as  due  in  part  to  auxiliary 
arrangements  on  the  part  of  the  employer 
which  he  would  otherwise  not  have  had  to 
make,  then  somewhat  different  arrangements 
seem  desirable.  All  existing  systems  of 
bonus  and  premiums  are  attempts  to  meet 
the  desire  for  such  arrangements. 

Actually,  however,  both  piece  work  and 
premium  on  a  50  per  cent  basis,  the  latter 
coupled  with  time  study  — have  been  in 
steady  use  in  the  British  cotton  industry  for 
nearly  forty  years,  as .  shown  above.  It  is 
evident  therefore  that  the  particular  system 
is  not  specially  important,  which,  as  they 
are  variants  one  of  the  other,  is  not  sur- 
prising. 

Third,  wherever  possible,  the  assessment 
of  piece  prices  should  be  associated  with  the 
maximum  efficient  use  of  a  particular  type 
of  machine.  This  may  vary  all  the  way  from 
elaborate  analysis  of  every  element  of  the 
machine's  operation  to  simple  speed  and  feed 
cards  for  each  kind  of  material  used.  In 
some  cases  it  need  not  be  connected  with  in- 
dividual product  at  all. 


THE    LABOR    QUESTION  421 

Fourth,  the  principle  of  a  stint  or  standard 
of  attainment  fixed  at  some  fair  percentage 
above  ordinary  day-work  output  is  very  use- 
ful, and,  if  properly  applied,  far  from  an  op- 
pressive feature.  Mr.  Grantt  has  made  suc- 
cessful use  of  this  idea,  though  it  has  of 
course  nothing  to  do  with  the  special  system 
of  task  payment  that  he  employs.  It  can 
equally  well  be  applied  to  any  system  of  task 
work  from  straight  piece  work  upwards.  Its 
chief  merit  is  that  it  provides  a  scale  for 
the  worker  to  measure  his  effort  by,  and  to 
reach  and  keep  in  the  top  class.  If  the  stand- 
ard is  reasonable  this  is  not  so  much  a  stimu- 
lation as  an  encouragement,  and  an  appeal  to 
the  sporting  instinct  that,  when  it  can  be  en- 
listed, is  one  of  the  most  powerful  factors  in 
successful  effort. 

Fifth,  the  question  of  cutting  of  rates  must 
be  courageously  met.  There  are  two  ways  in 
which  this  can  be  approached.  First,  by  an 
ironclad  agreement  formally  entered  into 
that  rates  shall  never  be  cut.  This  is  suc- 
cessfully applied  even  by  individual  firms, 
but  as  has  already  been  shown,  it  loses  most 
of  its  value  unless,  by  an  industry-wide 
agreement  with  the  workers,  the  employer  is 
protected  against  their  being  cut  by  competi- 


422     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

tors  in  the  same  business.  The  second  way  is 
by  the  adoption  of  a  rate  automatically  fall- 
ing as  production  is  increased.  The  Eowan 
premium  is  of  this  class,  but  it  has  the  draw- 
back that  it  is  not  very  easily  calculated, 
and  it  depresses  the  rates  much  too  quickly. 
But  even  such  an  automatic  rate,  though  it 
assists  the  problem  of  the  individual  plant, 
does  not  obviate  the  necessity  of  an  industry- 
wide agreement. 

The  main  difficulty  with  regard  to  rate  cut- 
ting lies  within  the  following  limits: 

Influence  of  Eepetition 

In  any  system  of  task  work,  long  re- 
peated,* it  is  evident  that  increasing  skill 
will  render  the  original  determination  out 
of  date — unless  it  is  assumed  that  time-study 
is  capable  of  foreseeing  and  allowing  for 
such  increase  of  skill.  Though  this  is  claimed, 
it  is  obviously  impossible  in  many  cases. 
Even  if  the  claim  is  allowed,  it  involves  a 
dilemma.    Either 

*  How  far  unexpected  results  may  arise  from  long- 
continued  repetition  of  work  is  instanced  in  the  following 
case:  "A  certain  linotype  operator  attained  the  ex- 
traordinary speed  of  10,000  ems  per  hour,  but  so  delicate 
was  the  adjustment  of  the  muscles  in  this  work,  that  if 
the  man  was  called  off  for  15  minutes  to  do  another  kind 
of  work,  it  so  disturbed  their  equilibrium  that  it  took  him 
an  hour  to  speed  up  to  his  former  gait". 


THE   LABOR   QUESTION  423 

(1)  The  time  limit  is  fixed  on  a  basis  of 
future  skill,  in  which  case  it  will  yield  poor 
results  till  that  skill  is  acquired,  or 

(2)  It  is  not  fixed  on  a  basis  of  future 
skill,  in  which  case  men's  earnings  will  ulti- 
mately become  disproportionately  large. 

The  elements  entering  into  the  question  of 
piece  rates  are,  in  fact,  not  yet  fully  worked 
out  in  their  .practical  bearings  by  any  of  the 
existing  systems.  There  are  two  halves  to 
the  problem,  one  concerning  the  different  de- 
grees of  skill  existing  in  any  given  body  of 
men,  and  the  other  concerning  the  possible 
increase  in  skill  arising  out  of  long-continued 
repetition  of  the  same  operation.  It  has  not 
yet  been  shown  that  these  two  halves  have 
any  relation  to  one  another.  In  other  words, 
it  is  not  proven  that  the  best  workman  on 
short  jobs  is  necessarily  the  best  workman 
on  long-continued  jobs.  Experience  points 
the  other  way. 

Any  working  force  is  made  up  of 

(1)  Men  below  the  average. 

(2)  Average  skilled  workers. 

(3)  Men  above  the  average. 

The  first  problem  of  remuneration  of  ef- 
fort is  to  fix  a  fair  price  for  the  work  of 


424     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

the  average  man ;  second,  so  to  arrange  mat- 
ters that  the  man  below  the  average  is  en- 
couraged to  acquire  increased  skill;  third, 
to  permit  the  highly  skilled  man  to  reap  the 
full  reward  of  his  superior  skill. 

Even  if  this  is  satisfactorily  done,  there 
remains  the  further  problem  of  increasing 
skill  due  to  long-continued  practice  on  the 
same  work.  It  is  this  element,  rather  than 
the  work  of  men  above  the  average,  that 
leads  to  cutting  of  rates. 

While  most  of  the  numerous  systems  of 
payment,  from  straight  piece-work  up  to  the 
latest  development  of  bonus,  meet  the  first 
half  of  the  problem  with  about  equal  effi- 
ciency, if  and  when  prices  are  based  on  accu- 
rate determination  of  the  proper  time  allow- 
ance, they  all  fail  to  meet  the  disturbance 
caused  by  the  slow  development  of  skill  aris- 
ing out  of  long-continued  practice. 

It  is  unlikely  that  the  last  word  has  been 
said  on  the  subject  of  wage  formulas.  Un- 
doubtedly new  ones  will  be  developed  to  com- 
bine certain  of  the  good  features  of  the  pres- 
ent systems  without  their  disadvantages. 
One  which  would  combine  the  definite  char- 
acter of  straight  piece  work,  with  the  "stint" 
or  standard  of  attainment  (which  provides  a 


THE   LABOR   QUESTION"  425 

goal  for  the  worker  to  aim  at),  and  at  the 
same  time  would  safeguard  the  question  of 
increasing  skill  due  to  long-continued  prac- 
tice, and  also  the  question  of  errors  in  rate 
fixing,  is  not  perhaps  impossible  of  develop- 
ment. 

A  study  of  the  more  prominent  varieties  of 
operation  -  incentive  -  piecework,  premium, 
bonus,  etc. — will  be  found  in  the  two  follow- 
ing chapters. 


Appendix  II 

THE  EXPENSE  BURDEN  IN  RELATION  TO 
PIECE  WORK  AND  PREMIUM 

'T^HE  fundamental  difference  between 
premium  and  piece  work  has  never,  to 
my  knowledge,  been  adequately  discussed. 
As  a  matter  of  practice,  premium  is  sup- 
posed not  only  to  be  superior  in  results  but 
also  different  in  principle.  We  shall  test 
thoroughly  the  soundness  of  that  view. 

The  exact  bearing  of  both  premium  and 
piece  work  on  "total"  or  "works"- cost  re- 
duction has  hitherto  received  but  little  at- 
tention, while  much  has  been  written  on  their 
bearing  on  wages  reduction.  Yet  of  the  two, 
reduction  of  "works"  cost,  that  is,  wages 
and  burden  (disregarding  material  as  being 
outside  the  question)  is  the  more  important, 
both  theoretically  and  practically. 

The  obscurity  in  which  this  question  re- 
mains is  largely  due  to  the  habit  of  regarding 
costs  as  merely  the  aggregate  of  wages  and 
material,  and  of  looking  on  "indirect  ex- 
pense", or  "expense  burden",  as  a  rather 
427 


428     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

theoretical  thing  that  may  be,  and  sometimes 
is,  tacked  on  to  costs,  at  the  fancy  of  the  ac- 
countant or  some  other  system-loving  per- 
son. When,  however,  we  recognize  that  in- 
direct expenses  are  passing  minute  by  min- 
ute into  the  real  cost  of  an  article  under 
process  of  manufacture,  we  not  only  widen 
our  point  of  view  in  a  very  useful  way,  but 
are  able  to  grasp  more  clearly  the  economic 
status  of  piece  work  and  premium. 

The  object  of  any  system  of  payment  be- 
yond simple  day  work  is  to  stimulate  produc- 
tion by  making  the  workman  directly  inter- 
ested in  lowering  "time  taken".  With  piece 
work  we  appear  to  contract  with  him,  with 
premium  we  appear  to  take  him  into  part- 
nership. Neither  of  these  popularly  accepted 
ideas  is  strictly  true.  Neither  of  them  takes 
into  account  what  practically  is  always  the 
chief,  and  in  some  cases  the  only,  benefit  to 
the  employer,  viz.,  a  reduced  works  cost  due 
to  savings  on  burden. 

The  present  inquiry  was  undertaken  with 
a  view  to  analyze  the  differences  and  com- 
pare the  results  of  premium  and  piecework 
in  the  light  of  total  cost  reduction.  Most 
people  have  assumed  that  the  tendency  to 
cut  rates  which  is  so  marked  a  feature  of 


PIECE   WORK   AND   PREMIUM  429 

piece  work,  which  is  so  greatly  diminished 
by  the  Halsey  plan  and  totally  absent  in  the 
Eowan  plan,  is  due  to  some  very  marked 
difference  in  principle  between  the  first  two, 
and  a  mere  difference  of  detail  between  the 
last  two.  The  result  would  appear  to  point 
the  other  way.  Considering  piece  work  and 
ordinary  premium  only,  for  the  moment, 
there  is  no  difference  in  principle  between 
them  at  all. 

Piece  work  is  exactly  the  same  thing  as 
premium  work,  only,  instead  of  the  premium 
being  33  1/3  per  cent  or  50  per  cent,  it  is 
100  per  cent.  In  all  other  respects  they  are 
fundamentally  the  same. 

If  we  commence  by  disregarding  expense 
burden  altogether,  or  assume  it  to  equal  zero, 
it  will  be  seen  that  a  very  important  practi- 
cal difference  results  from  offering  what  is 
called  premium  instead  of  what  is  termed 
piece  work.  In  the  former  case,  only  a  half 
or  a  third  of  the  total  saving  goes  to  the 
worker.  In  the  latter,  100  per  cent,  or  in 
other  words,  all  the  saving  goes  to  the 
worker.  It  follows  from  this,  that  except 
in  the  light  of  expense  burden,  the  employ- 
er's benefit  from  piece  work  is  limited  to 
advantages  of  no  great  economic  importance 


430     SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

—  (1),  the  time  limit  or  "price"  set  for  piece 
work  is  usually  slightly  lower  than  previous 
day  work  records;  (2),  a  fixed  instead  of 
a  variable  cost  is  obtained  for  the  piece ;  (3), 
the  resulting  concentration  of  the  worker's 
attention  generally  produces,  after  a  time,  a 
more  uniform  and  accurately  wrought  prod- 
uct; (4),  a  quicker  output  results,  which  is 
sometimes  of  advantage,  but  not  necessarily 
always  of  advantage.  The  worker's  bene- 
fit, on  the  other  hand,  is  that  he  makes  con- 
siderably higher  wages. 

The  practical  instinct  of  employers  has, 
however,  always  realized  two  controlling  ele- 
ments :  first,  that  expense  burden  has  a  vital 
connection  with  the  question,  and  that  an  ac- 
tual reduction  in  time  taken  means  a  reduced 
total  or  works  costs,  though  it  does  not  mean 
a  reduction  in  wages  cost;  secondly,  that 
after  a  certain  point  is  reached,  excessive 
earnings  on  the  part  of  the  man  are  out  of 
proportion  to  the  benefit  from  reduction  in 
burden  realized  by  the  employer.  How  these 
two  elements  are  really  interconnected  will 
be  shown  later,  but  that  the  desire  to  cut 
rates  is  not  merely  jealousy  of  the  worker's 
high  wages,  may  be  gathered  by  supposing 
a  case  in  which  the  work  was  given  out  to 


PIECE    WOKK   AND   PREMIUM  431 

a  homeworker  or  a  small  outside  firm.  In 
such  a  case,  very  few  employers,  having  once 
made  their  contract,  would  trouble  them- 
selves at  all  as  to  whether  the  outworker  was 
making  "a  good  thing"  out  of  the  contract — 
even  though  they  were  fully  aware  of  it.  But 
when  by  use  of  the  employer's  own  organiza- 
tion, machinery,  and  facilities  the  worker's 
wages  become  excessive,  he,  the  employer,  is 
inclined  to  call  a  halt.  This  will  always  be 
so,  by  whatever  term  the  worker's  reward  is 
designated,  as  long  as  the  premium  is  a  very 
high  one,  as  it  is  in  piece  work. 

As  will  be  shown  presently,  the  trouble 
with  piece  work  is  that,  with  the  expense 
burdens  usually  existing  in  machine  shops, 
the  man's  share  relative  to  the  fall  in  works 
cost  is  always  disproportionately  high,  and 
that  under  piece  work,  cost  can  never  be 
halved  unless  the  burden  is  well  over  100  per 
cent  (practically  160  per  cent  or  higher). 
Yet  the  doubling  of  the  workman's  wages 
takes  place  long  before  this  stage  is  ap- 
proached. 

In  all  systems  of  premium  payment, 
whether  the  rate  be  33  1/3  per  cent  or  up  to 
100  per  cent,  a  reduction  of  the  time  allow- 
ance brings  benefit  to   the  employer  in  in- 


432     SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

verse  proportion  to  the  amount  of  the 
premium.  He  gains  by  a  share  in  the  saving 
of  wages  cost  (except  in  the  single  case  where 
premium  is  100  per  cent,  as  in  piece  work) 
and  he  also  gains  by  saving  the  indirect 
charges  or  burden  on  the  unexpended  time. 
Obviously,  therefore,  premium  is  not  equally 
remunerative  to  the  employer  in  all  cases. 
The  higher  the  burden,  the  sharper  is  the 
fall  of  the  works-cost  line  relative  to  wages, 
as  cost  is  reduced.  At  very  low  burdens — 
where  the  percentage  of  burden  to  wages  is 
lower  than  the  percentage  of  premium  paid 
to  the  man — the  fall  of  works  cost  becomes 
proportionately  less  sharp  as  cost  is  reduced. 
In  piece  work,  therefore,  where  the  percent- 
age of  premium  is  as  high  as  100  per  cent, 
it  may  frequently  happen  that  great  ineffi- 
ciency results  though  the  worker  may  be 
making  double  wages.  These  points  will  be 
made  clear  by  the  diagrams  which  follow 
later.  A  few  numerical  examples  will  first 
be  given ;  a  100  per  cent  burden  is  assumed 
in  all  three  cases.  Unit  prices  for  unit  time 
are  also  assumed  (one  dollar  or  one  shilling 
for  one  hour) — the  figures  can  therefore  be 
read  in  terms  of  price  or  time  as  necessary. 
A  further  analysis  of  the  employer's  sav- 


PIECE    WORK   AND   PREMIUM  433 

ing  tabulated  on  this  page  shows  the  relative 
influence  of  premium  and  burden  in  the  re- 
sult. 

An  examination  of  these  three  sets  of  fig- 
ures will  show  that  the  employer's  saving  is 
made  up  of  two  elements — a  saving  of  bur- 
den, which  is  of  course  strictly  proportional 
to  the  incidence  of  burden  only  and  has  no 
relation  to  the  rate  of  premium,  and  a  share 
of  the  saving  of  time  as  expressed  in  wages, 

man's  earnings  and  employer's  savings  at  different  premium  rates 
(Burden  100  per  cent.)j 

Premium 
Premium  Premium         100  per  cent. 

333-1$  per  cent.       50  per  cent.        (Piece  Work) . 

I.  Time  Not  Reduced — 

Wages  for  full  time ..  .  100  100  100 

Burden  for  full  time. . .  100  100  100 

Works  Cost 200  200  200 

II.  Time  Reduced  by  Half — 

Wages  for  half  time...  50  50  50 

Premium  Earned 17  25  50 

Burden  on  half  time  50  50  50 

SaviDg  to  Employer.  83  75  50 

Original  Allowance. .  200  200  200 

III.  Analysis  of  Saving — 

Saving  in  Wages  (%  of 

50)=  33     (J^  of  50)  =25  (None)— 

Saving  in  Burden  (100 

per  cent  on  50) 50  50  50 

83  75  50 

IV.  Relative  Share — ■ 

Man's  Share  of  Saving: 

Wages... 50  50  50 

Premium 17  25  50 

67  75  100 

Employer's    Share    of 
Saving 83  75  50 

V.  Reduction  in  Works  Cost — 

Percentage   of   Reduc- 
tion   413^  373^  25 


434     SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

which  share  is  wholly  determined  by  the  rate 
of  premium.  Where  premium  is  100  per 
cent,  as  in  piece  work,  this  share  equals  0, 
and  that  is  all  the  difference  there  is  between 
piece  work  and  any  other  premium  rate. 

It  will  further  be  observed  that,  in  the 
case  taken,  where  burden  is  100  per  cent  of 
wages,  the  relative  positions  of  man  and  em- 
ployer, when  time  is  reduced  by  half,  are 
very  significant.     See  III,  page  433. 

The  disproportionate  share  of  advantage 
obtained  by  the  man  under  piece  work  is 
seen  at  once — when  time  is  halved  the  man 
is  getting  twice  the  benefit  that  the  employer 
gets,  and  though  the  man  is  drawing  double 
pay  the  total  or  works  cost  has  only  been  re- 
duced by  25  per  cent  (50  on  200).  The  other 
two  percentages  show  a  different  distribution 
of  the  saving  as  between  employer  and  man, 
and  therefore  a  different  degree  of  lowering 
of  works  cost  as  shown  in  V,  page  433. 

The  important  bearing  of  expense  burden 
on  cost  reduction  under  premium  plans  hav- 
ing been  outlined,  and,  incidentally,  the  iden- 
tity of  piece  work  with  premium  in  principle 
having  been  shown,  their  further  relations 
may  be  examined  in  detail  by  means  of  the 
diagrams  on  pages  438  and  439,  which  repre- 


PIECE   WORK   AND   PREMIUM  435 

sent  four  varieties  of  premium  payment  in 
their  relation  of  burdens  varying  from  25  per 
cent  to  150  per  cent. 

Explanation  of  the  Diagrams 

For  purposes,  of  comparison  an  allowance 
of  100  hours  is  assumed  for  the  two  premium 
systems,  while  for  the  piece-work  system  an 
equivalent  price  of  100  price-units  is  fixed — 
such  price-units  being  1  per  hour.  In  other 
words,  the  ordinary  wrage  rate  is  assumed 
throughout  to  be  one  shilling  or  one  penny, 
one  dollar  or  one  cent,  per  hour — the  mone- 
tary value  being  a  matter  of  no  consequence, 
as  long  as  we  remember  that  it  is  one  per 
hour.  The  vertical  column  of  figures  repre- 
sents rise  in  cost  from  0  to  250  of  such  price- 
units  (dollars,  shillings,  etc.).  The  hori- 
zontal figures  represent  "time  taken"  from 
0  to  100  hours. 

The  thick  line  running  diagonally  from  100 
down  to  0  represents  wages  cost  on  the  job. 
Thus  100  hours  cost  100  shilling  or  dollars, 
30  hours  cost  30  shillings  or  dollars,  and  so 
forth. 

The  dotted  line  represents  the  total  receiv- 
able by  the  man,  made  up  of  (1)  wages,  (2) 


436      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

premium.  The  distance  betiveen  the  dotted 
line  and  the  thick  line  therefore  represents 
amount  of  premium  (or  piece  earnings)  ex- 
pressed in  price  units. 

The  fine  lines  represent  total  works  cost. 
This  is  obtained  by  aggregating  (1)  time 
taken,  (2)  indirect  expenses  or  burden  on 
time  taken,  and  (3)  amount  of  premium 
earned.  Several  of  these  are  shown,  giving 
the  different  total  works  costs  at  different 
rates  of  burden,  from  25  per  cent  to  150 
per  cent. 

General  Features  of  the  Diagrams 

The  first  thing  that  will  strike  the  observer 
is  the  different  degree  of  steepness  shown 
by  the  lines  representing  total  works  cost. 
As  this  particular  item  is  the  real- object  of 
the  employer's  care,  it  is  more  important 
than  the  others.  It  will  be  seen  at  once,  for 
instance,  that  each  of  the  three  methods  pre- 
sents peculiar  characteristics.  In  the  piece- 
work diagram  the  lines  tend  more  to  the  hori- 
zontal and  terminate  very  high  up  (on  the 
right-hand  side).  In  the  Halsey  system  they 
are  steeper  than  in  piece  work,  and  go  lower. 
In  the  Rowan  system  they  possess  about  the 


PIECE   WORK   AND   PREMIUM  437 

same  degree  of  steepness  as  in  the  Halsey, 
but  tend  to  cnrve  inwards  as  the  time  taken 
approaches  a  minimum,  and  they  finally 
reach  zero. 

This  steepness  represents,  of  course,  the 
rate  of  fall  of  total  works  cost,  as  less  and 
less  time  is  taken  by  the  workman  to  carry 
out  the  job.  It  is  a  measure  of  the  effective- 
ness of  each  system  to  produce  the  results 
wished  for  by  the  manufacturer,  viz. :  to  re- 
duce actual  costs  per  piece.  In  each  of  the 
four  diagrams  it  will  be  seen  that  the  higher 
the  burden  of  indirect  charges,  the  steeper 
is  the  fall  of  works  cost.  But  as  between 
the  systems  there  is  much  variation  in  the 
degree  of  this  fall,  and  consequently  in  rela- 
tive efficiency. 

The  second  noticeable  feature  of  the  dia- 
grams is  the  relation  of  the  dotted  line  to 
the  thick  line.  The  distance  between  these 
two  lines  is  the  amount  of  premium  or  piece 
earnings  at  various  " times  taken".  It  will 
be  seen  at  once  how  enormously  the  work- 
man's share  in  piece  work  tends  to  increase 
as  time  is  lowered;  how  in  the  Halsey  sys- 
tem it  tends  to  rise  to  a  very  much  larger 
amount  than  direct  wages  shortly  after  pro- 
duction is  doubled;    and  finally,  how  in  the 


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1."     PIECE   WORK 


2. 


The  Engineering  Magazine 
HALSEY  50  PER  CENT 


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3.      HALSEY   33  1/3   PER   CENT 


The  Engineering  Magazine 
4.      ROWAN    PREMIUM 

An  allowance  of  100  hours  is  assmued  for  the  premium  sys- 
tem, and  an  equivalent  of  100  price  units  (wage  hours)  for  the 
piece-work  system.  Diagonal  thick  line  is  wages  cost  of  job. 
Dotted  line  shows  total  receivable  by  man — wages  plus  pre- 
mium. Distance  between  thick  line  and  dotted  line  on  any 
vertical  shows  premium  for  the  corresponding  time.  Fine  lines 
show  total  works  cost,  made  up  of  time  taken,  burden  on  time 
taken,  and  premium 


440     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

Bowan  system  its  ratio  to  wages  rises  stead- 
ily throughout,  up  to  99  per  cent  and  not  be- 
yond. 

A  third  feature  of  the  diagrams  is  that 
whether  the  premium  is  33  1/3,  50  or  100  per 
cent,  there  exists  a  "critical"  point  at  which 
the  works-cost  line  tends  to  diverge  from, 
instead  of  approaching,  the  wages  line.  This 
always  takes  place  when  the  rate  of  premium 
is  greater  than  the  percentage  of  burden. 
It  affords  an  argument  for  low  rates  of  pre- 
mium, particularly  in  specialty  depart- 
ments, where  the  burden  is  low.  It  also  af- 
fords a  demonstration  of  the  weakness  of  so 
high  a  premium  as  100  per  cent  (piece  work), 
because  a  smaller -rate. of  burden  than  this 
is  not  infrequent,  even  in  machine  shops.  Ex- 
cept with  burdens  considerably  over  150  per 
cent  it  is  practically  impossible  ever  to  halve 
works  cost  on  this  system. 

The  Bowan  System 
Before  proceeding  with  a  comparison  of 
the  data  afforded  by  the  diagrams,  it  may 
be  desirable  to  give  some  details  of  the 
Bowan  variety  of  premium  payment.  Al- 
though a  writer*  in  the  Engineering  Maga- 

*  Mr.  Carl  Bender,  Systems  of  Wages;   The  Engineering 
Magazine,  December,   1908. 


PIECE   WORK   AND   PREMIUM  441 

zine  formerly  stigmatized  this  system  as 
"both  fallacious  and  inhuman",  it  is  in- 
cluded here  because  in  the  present  writer's 
opinion  it  possesses  important  practical  fea- 
tures which  override  any  such  hasty  condem- 
nation. 

In  the  original  Halsey  system,  the 
premium  is  based  on  our  view  of  the  facts 
of  lowered  cost;  in  the  Rowan  system  a 
different  view  is  taken.  Mr.  Halsey 's  method 
is,  as  already  shown,  a  lowered  piece-work 
rate  of  33  1/3  or  50  instead  of  100  per  cent. 
Mr.  Rowan's  method  is  based  on  a  different 
principle,  viz. : — an  increase  of  the  man's  pay 
proportionate  to  the  reduction  of  the  time  al- 
lowance. Instead  of  saying  to  the  man  that 
he  shall  receive  33  1/3  or  50  per  cent  of  what 
he  saves,  the  Rowan  system  puts  it  another 
way.  It  says,  in  effect,  that  if  he  reduces 
time  25  per  cent  or  50  per  cent,  his  pay  shall 
be  increased  25  per  cent  or  50  per  cent  or 
whatever  other  fractional  reduction  of  time 
he  effects.  Comparison  of  the  Rowan  with 
the  Halsey  diagram  shows  that  an  important 
difference  in  principle  is  here  involved.  The 
premium  area  in  the  former  is  bounded  by 
a  closed  curve.  In  the  latter  it  is  a  con- 
stantly  increasing   segment.     Inferentially, 


442     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

we  see  that  in  the  Bo  wan  system  no  possible 
error  in  fixing  time  allowance  can  lead  to  a 
man's  earning  double  wages.  It  is  this 
feature  that  Mr.  Bender  describes  as  "in- 
human", but,  as  will  be  shown  later,  this 
strong  expression  arises  from  a  confusion 
of  thought  between  what  can  be  done  and 
what  ought  to  be  done  on  any  system  of  pay- 
ment by  results.  The  object  is  not  to  enable 
workmen  to  earn  double  pay,  but  to  effect 
two  things:  (1)  incentive  to  increase  pro- 
duction at  the  right  moment  and  under  the 
right  conditions;  and  (2)  a  just  and  equit- 
able distribution  of  the  saving  so  effected. 

Fallacies  with  Begard  to  Premium  Systems 

In  distinguishing  between  the  practical  re- 
sults obtained  from  piece  work,  premium, 
differential,  and  bonus  systems,  credit  is  fre- 
quently given  to  a  system  for  something  that 
has  nothing  to  do  with  the  merits  of  that 
system.  This  is  well  brought  out  in  Mr.  Ben- 
der 's  very  interesting  and  instructive  com- 
parison of  wages  systems  already  referred 
to.  In  discussing  the  Taylor  system,  for  ex- 
ample, it  is  said  that  "Mr.  Taylor  scorns 
the  suggestion  that  by  any  chance  the  worker 
could  earn  excessive  wages".    This,  we  find, 


PIECE    WORK   AND   PREMIUM  443 

is  based  not  on  any  peculiarity  of  the  sys- 
tem, but  on  the  premises  that  "the  method  of 
standard-time  determination  is  so  rigorous 
that  the  worker  cannot  figure  on  curtailing 
his  output".  The  Gantt  bonus  system  de- 
pends for  its  successful  working  on  a  sim- 
ilar rigorous  time  determination.  In  the 
Emerson  efficiency  system  also,  Mr.  Bender 
says,  "the  standard  time  required  for  every 
job  should  be  scientifically  ascertained ". 

Now  we  have  here  preliminary  conditions 
that  are  the  actual  controlling  features  of  the 
situation.  With  very  accurately  determined 
standard  times,  it  is  perfectly  obvious  that 
the  right-hand  halves  of  all  our  diagrams 
could  never  come  into  use.  Yet  it  is  towards 
the  middle  and  right-hand  half  of  the  dia- 
grams that  the  difference  between  the  sys- 
tems becomes  most  marked.  For  small  in- 
creases in  production  the  variation  in  works 
cost  between  the  different  systems  is  compar- 
atively small,  and  as  everything  in  that  case 
depends  on  incentive,  it  is  quite  an  open 
question  where  burden  is  over  100  per  cent 
whether  the  piece  work  system,  with  its  100 
per  cent  premium,  would  not  work  out  as 
well  in  practice  as  any  other. 

The  success  of  a  system  which  implies  and 


444     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

necessitates  a  vigorous  pre-determination  of 
standard  times  or  a  close  and  careful  study 
of  routine  operations,  cannot  be  compared 
with  the  success  of  other  systems  of  which 
the  chief  merit  is  flexibility  and  ability  to 
meet  unforeseen  conditions.  In  the  writer's 
opinion  the  Eowan  system  fulfils  this  last 
definition  more  completely  than  the  Halsey, 
for  as  will  be  seen  from  the  diagrams,  it  of- 
fers its  greatest  degree  of  incentive  for  mod- 
erate cost  reductions,  and  one  of  its  chief 
virtues  is  that  for  such  exaggerated  results 
as  five-fold  production,  which  can  be  due  only 
to  the  absence  of  a  rigorous  determination 
of  standard  times,  it  protects  the  employer 
while  still  adequately  rewarding  the  man. 

The  Piece-Work  Diagram 

Under  piece  work  (=  a  premium  of  100 
per  cent)  the  ratio  of  premium  earned  rises 
from  11  per  cent  for  a  saving  of  10  hours 
up  to  a  900  per  cent  premium  for  the  saving 
of  90  hours.  It  will  be  noticed  that  halved 
works  cost  cannot  in  practice  be  realized  by 
this  system.  It  only  appears  once  on  the 
diagram,  viz.,  in  the  case  of  a  150  per  cent 
burden,  and  more  than  five-fold  production 
is  necessary  to  realize  it.    In  such  a  case  the 


PIECE   WORK   AND   PREMIUM  445 

man  would  be  obtaining  a  premium  of  85  as 
against  a  wage  cost  of  15,  or  about  570  per 
cent.  A  reduction  of  one-quarter  in  works 
cost  is  only  reached  in  practice  at  or  about 
doubled  wages,  when  burden  is  100  per  cent 
or  over.  It  should  also  be  observed  that 
where  burden  is  100  per  cent  the  works-cost 
line  is  parallel  to  the  wages-cost  line.  Below 
100  per  cent  they  diverge,  indicating  that 
the  rate  of  reduction  in  works  cost  is  less 
than  that  of  wages  cost — also  indicating  a 
lessened  efficiency  just  where  the  worker's 
reward  tends  to  increase. 

The  Halsey  Diagrams 

Separate  diagrams  are  given  for  33  1/3 
per  cent  and  50  per  cent  premiums.  They 
present  advantages  over  piece  work  just  in 
the  degree  that  the  percentage  of  premium 
is  lower.  It  will  easily  be  seen  (and  it  is  a 
conclusive  argument  as  to  the  real  identity 
of  piece  work  and  premium  in  principle) 
that  intermediate  diagrams  of  90,  80,  76  and 
60  per  cent  premium  could  be  constructed 
and  they  would  show  a  gradual  transforma- 
tion from  the  horizontal  price  line  of  the 
piece-work  diagram  to  the  inclined  lines  of 
the  two  Halsey  diagrams.     The  circles  and 


446     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

crosses,  representing  one-quarter  and  one- 
half  reduction  in  works  cost,  would  also 
gradually  enter  and  pass  from  right  to  left 
in  successive  diagrams. 

The  principal  point  of  interest  in  these 
two  diagrams  is  in  the  fact  that,  by  compari- 
son with  the  piece-work  diagram,  they  show 
the  whole  relation  of  higher  or  lower  pre- 
mium rates  to  the  various  elements  of 
production,  viz.:  wages  cost,  man's  total 
earnings,  his  share  relative  to  wages,  effect 
of  increased  production  at  different  burdens, 
and  the  rate  of  fall  of  works  cost  relative  to 
wages. 

It  will  perhaps  be  unnecessary  now  to  go 
over  these  points  in  detail  because  a  com- 
parative study  of  the  diagrams  themselves 
will  reveal  them,  and  their  more  important 
features  will  be  summed  up  later.  It  may 
be  remarked,  however,  that  as  in  the  case  of 
piece  work,  where  the  burden  rate  is  below 
the  premium  rate,  as  in  the  25  per  cent  bur- 
den on  either  diagram,  works  cost  does  not 
fall  as  quickly  as  wages  cost,  although — the 
premium  rates  being  much  lower  —  the  di- 
vergence is  proportionately  less.  Under  spe- 
cial conditions,  however,  this  divergence 
might  have  a  practical  significance. 


PIECE    WORK   AND    PREMIUM 


447 


The  Rowan  Diagram 

The  closed  curve  of  the  Rowan  premium 
rate  is  really  equivalent  to  a  gradually  fall- 
ing Halsey  premium  rate.  This  point  is  so 
important  that  a  special  diagram  may  use- 
fully be  introduced  to  illustrate  it. 

It  will  be  seen  that  so 
far  from  being  "inhu- 
man", the  Rowan  sys- 
tem is  actually  more 
generous  to  the  worker 
than  a  Halsey  50  per 
cent  premium  until 
wages  cost  is  halved, 
and  remains  more  gen- 
erous than  a  Halsey 
33 1/3  per  cent  pre- 
mium until  wages  cost 
is  reduced  two-thirds! 
The  radiating  lines  of  the  Halsey  premiums 
corresponding  to  the  various  stages  of  the 
Rowan  premiums  do  in  fact  exhibit,  in  prac- 
tice, that  gradual  transformation  from  very 
nearly  100  per  cent  premium  down  to  10  per 
cent  premium  that  was  spoken  of  above, 
when  it  was  said  to  be  quite  possible  to  con- 
struct a  successive  series  of  diagrams  show- 
ing such  intermediate  stages. 


Halsey  Premiums  Corresponding 

with  Successive  Stages  of 

Rowan  Premium. 

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The  Engineering  Magazine 
5.      THE   ROWAN    SYSTEM 


448     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

The  practical  value  of  this  variety  of 
premium  is  that  it  provides  incentive  just 
where  incentive  is  wanted,  viz.:  at  the  left- 
hand  of  the  diagrams  representing  progress 
from  full  time  to  halved  time.  It  has  the 
further  advantage  that  a  considerable  error 
in  time  allowance  which  would  bring  the 
wages  cost  well  over  into  the  right-hand  side 
of  the  diagram,  say  for  example  up  to  the 
point  of  four-fold  or  five-fold  production, 
does  not  disproportionately  increase  the 
man's  earnings  and  render  it  necessary  to 
cut  rates,  however  great  the  error. 

The  point  of  view  of  the  Eowan  system 
presents  other  practical  advantages  which  I 
believe  are  not  realized  on  any  other  method. 
Where  premium  has  replaced  piece  work,  an 
atmosphere  of  dissatisfaction  is  not  infre- 
quently found,  as  soon  as  the  men  see  that 
the  employer  is  obtaining  the  lion's  share  of 
the  saving.  Very  frequently  they  fail  to  real- 
ize that  rates  will  not  be  cut,  and  indeed  an 
examination  of  the  diagrams  will  show  that 
after  a  certain  point  there  is  just  as  much 
temptation  to  cut  a  high  Halsey  premium  al- 
lowance, as  a  high  piece-work  price.  More- 
over, it  is  very  well  known  to  have  actually 
been  done.    Under  the  Eowan  method,  how- 


PIECE   WORK   AND   PREMIUM 


449 


ever,   there   is   no    question   of   an   unequal 
share  of  saving  introduced  at  all.  The  Eowan 
proposition  takes  the  form  of  giving  the  man 
an    addition    to    his 
hourly   rate   propor- 
tional to  the  time  he 
saves.    If  he  saves  a 
quarter  of  the  time, 
he  receives  time-and- 
a-quarter ;  if  he  saves 
half    the    time    he 
receives    time-and-a- 
half.    It  is  a  positive 
merit  of  the  system 
that  it  does  not  re- 
spond to  the  abnor- 
mal case  propounded 
by    Mr.    Bender,    in 
which    one    man    is 
supposed  to  take  half 
an  hour  and  another 
5  %  hours  to  do  the 
same   job,    because 
such  a  condition  of  things  would  be  an  ab- 
surdity, and  would  call  for  the  prompt  dis- 
charge of  one  of  the  men,  and  of  the  indi- 
vidual who  fixed  so  wildly  inaccurate  a  time 
allowance.     A   careful   examination   of  the 


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The  Engineering  Magazine. 
HALSEY   AND   ROWAN 
COMPARED 


450     SCIENCE  AND  PRACTICE   OF   MANAGEMENT 

diagrams  will  show  that  whatever  merits 
the  Halsey  system  has,  the  Eowan  system 
preserves  and  adds  others  of  its  ♦own. 

Conclusion 

The  great  aim  of  any  system  of  cost  re- 
duction must  be  to  reduce  "works"  cost. 
This  is  effected  in  different  degree  by  each 
of  the  four  methods  selected  for  examina- 
tion. Diagram  No.  6  shows  all  four  pre- 
miums plotted  together  on  the  same  wages- 
cost  line,  and  a  100  per  cent  wages  and  bur- 
den line  added,  based  on  the  fall  of  costs 
only,  without  taking  into  consideration  the 
premiums  earned. 

This  100  per  cent  line  shows  what  would 
be  the  actual  works  cost  (at  100  per  cent 
burden)  if  the  fall  of  cost  were  tvholly  due 
to  improved  methods  of  production  and  not 
to  the  extra  exertions  of  the  men.  Obviously 
this  is  the  ideal  condition  desired  by  the  em- 
ployer, and  from  a  certain  point  of  view,  the 
necessity  of  paying  premiums  to  effect  this 
reduction  is  a  necessary  evil.  By  plotting 
the  premiums  between  this  100  per  cent  line 
and  the  wages-cost  line,  we  see  how  they 
bulk  in  each  case,  compared  with  this  ideal 
(but  of  course  unrealizable)   fall  in  works 


PIECE   WORK  AND   PREMIUM  451 

cost.  It  will  be  seen  that  the  piece-work  line 
soon  passes  outside  the  100  per  cent  line, 
that  the  two  Halsey  premiums  follow  suit  one 
after  the  other,  but  that  the  Eowan  premium 
never  does.  The  whole  significance  of  this 
diagram  lies  in  the  fact  that  100  per  cent  is 
generally  supposed  to  be,  and  often  is,  an 
average  burden,  and  it  is  suggested  that  the 
points  at  which  the  various  premiums  cross 
the  100  per  cent  line  is  where  the  practical 
instinct  of  the  employer  begins  to  make  him 
uneasy,  and  desirous  of  cutting  prices  or  al- 
lowances. I  do  not  wish  to  lay  too  much 
stress  on  this  diagram,  but  it  is  certainly 
suggestive. 

The  practical  deductions  from  the  forego- 
ing study  of  the  four  methods  are  not  many 
but  they  are  important.    They  are : 

(1)  That  premium  methods  gain  in  im- 
portance precisely  in  proportion  to  the  bur- 
den (that  is,  in  proportion  to  the  size  and 
value  of  machines  used,  cost  of  power,  han- 
dling machinery,  high  value  of  land  or  build- 
ings, expensive  nature  of  supervision,  etc.). 

(2)  That  where  very  accurate  time  allow- 
ance can  be  thoroughly  depended  on,  the  sys- 
tem which  gives  the  sharpest  fall  of  works 
cost  is,  other  things  apart,  the  best.     This 


452     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

condition  is  fulfilled  by  Halsey  33  1/3  per 
cent,  in  which  the  fall  is  sharper  than  Eowan 
nntil  wages  cost  has  been  reduced  between 
y2  and  2/3 — an  event  not  likely  to  happen  if 
time  allowances  are  accurate.  But  this  con- 
sideration is  influenced  by  the  question  of  in- 
centive. For  the  same  time  allowance,  the 
incentive  to  reduce  cost  is  greater  under  both 
piece  work  and  Eowan  system  than  under 
Halsey  in  the  earlier  stages.  As  it  has  been 
proved  over  and  over  again  that  added  in- 
centive (raising  of  time  allowance)  has 
proved  the  key  to  unlock  the  workman's  am- 
bition, the  advantage  of  Halsey  over  Eowan 
is  perhaps  doubtful.  If  the  man  can  be  got 
to  work  equally  energetically  under  either 
plan,  then  under  the  Halsey  plan  works  cost 
falls  more  sharply,  but  as  the  Eowan  plan, 
for  the  same  time  allowance,  provides  a 
larger  incentive  ( and  therefore  a  slightly 
higher  works  cost)  its  effect  on  the  man  is 
presumably  greater.  In  the  case  of  very  ac- 
curate time  allowances,  therefore,  there 
seems  to  be  a  certain  balance  of  advantages 
between  the  two  methods. 

(3)  Where  time  allowances  are  not  scien- 
tifically and  very  accurately  determined,  then 
there  can  be  no  question  which  method  has 


PIECE  WORK   AND   PREMIUM  453 

the  balance  of  advantages.  If  the  determina- 
tion is  very  bad,  then  the  Halsey  premium, 
even  when  as  low  as  33  1/3  per  cent,  gives 
the  man  a  wholly  disproportionate  share  if 
he  reduces  the  nominal  time  to  its  real  work- 
ing value.  On  the  Eowan  plan  the  falling 
premium  rate  automatically  compensates  for 
such  errors,  wThile  still  giving  the  worker  a 
fair  reward  for  extra  effort.  (The  point  at 
which  the  premium  lines  pass  outside  the  100 
per  cent  lines  in  Diagram  6  illustrates  this 
aspect  of  the  question.) 

(4)  For  very  low  burdens,  such  as  25  per 
cent,  only  realized,  of  course,  in  very  special 
work,  a  very  small  Halsey  premium  not  ex- 
ceeding the  ratio  of  burden  would  perhaps 
lead  to  the  most  efficient  results.  The  Rowan 
system  does  not  seem  to  be  adaptable  to  very 
small  burdens,  because  the  lines  of  its  very 
high  premium  rates  at  the  beginning  diverge 
very  greatly  from  works-cost  fall.  It  is  only 
with  burdens  of  75  per  cent  or  100  per  cent 
and  over  that  the  best  efficiency  can  appar- 
ently be  obtained  from  the  Rowan  system. 

Generally  speaking,  the  results  of  this  ex- 
amination go  to  show  that  the  merits  of  any 
system  of  premium  payment  are  a  balance 
between  incentive  and  actual  steepness  of  fall 


454     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

of  works  cost.  Naturally,  the  nearer  works 
cost  approaches  the  ideal  line  in  Diagram  6, 
the  better.  The  best  premium  is  that  which 
raises  this  line  as  little  as  possible.  Obvi- 
ously, two  considerations  are  involved:  (1) 
Enough  must  be  offered  to  effect  the  reduc- 
tion in  the  first  place;  (2)  it  must  not  be  so 
much  as -to  make  the  resulting  line  as  flat 
as  is  shown  in  the  case  of  piece  work.  As  a 
purely  abstract  statement,  it  may  be  said  to 
be  just  as  little  as  the  worker  can  be  induced 
to  accept,  and  yet  keep  his  energies  directed 
toward  reducing  cost  further  and  further. 
This  is  the  economic  statement  of  the  plain 
truth,  but  like  most  economic  statements  it 
has  to  be  considered  alongside  human  nature 
and  with  human  sympathy  before  it  becomes 
other  than  an  engine  of  discord  and  strife. 
Of  the  four  systems  examined,  the  Eowan 
system  seems  to  prevent,  in  practice,  any  ar- 
rival at  a  point  where  the  interests  of  em- 
ployer and  employee  come  into  actual  con- 
flict. It  either  produces  or  fails  to  produce 
sufficiently  satisfactory  economic  results.  In 
neither  case  does  anybody  lose;  they  only 
fail  to  gain.  There  is  a  psychological  differ- 
ence in  that  which  has  important  practical 
bearings,   and  makes   for   industrial   peace. 


PIECE   WORK   AND   PREMIUM  455 

And  a  remedy  can  generally  be  found,  where 
interests  do  not  drift  into  antagonism  at  any 
stage  of  their  relations. 

In  the  present  chapter  those  systems  of 
payment  for  labor  are  alone  discussed  which 
depend  upon  a  simple  time  limit  and  sharing- 
out  of  the  savings  effected  by  the  reduction 
of  this  nominal  limit.  A  subsequent  paper 
will  deal  with  the  relation  of  burden  to 
"task"  or  "bonus"  systems  in  which  the 
worker's  benefit  either  commences  or  is 
greatly  increased  at  a  predetermined  point, 
and  the  success  of  the  system  in  practice  de- 
pends upon  the  proportion  of  workers  who 
attain  or  pass  this  point.  As  this  involves 
quite  a  different  point  of  view  from  ordinary 
piece  work  or  premium,  it  must  be  made  the 
subject  of  a  separate  discussion. 


Appendix  III 

THE  EXPENSE  BTTKDEN  IN  BELATION  TO 
BONUS 

T  N  Appendix  II,  those  systems  of  payment 
A  were  discussed  which  depend  upon  a 
simple  time  limit  and  an  equally  simple  law 
of  apportionment  of  the  reduction  made.  In 
this  chapter,  the  newer  and  more  complex 
"task"  or  "bonus"  methods  will  be  re- 
viewed in  the  light  of  their  bearing  on  works 
cost,  i.  e.,  prime  cost  plus  expense  burden. 

The  two  principal  methods  are  the  Gantt 
Bonus  Method  and  the  Emerson  Efficiency 
Method.  It  is  necessary  to  treat  these  two 
systems  of  remuneration  from  a  different 
standpoint  from  that  adopted  for  the  exam- 
ination of  the  others,  inasmuch  as  they  are 
the  outcome  of  what  might  almost  be  looked 
on  as  a  new  philosophy  of  manufacture — a 
revolution  which  is,  however,  really  a  return 
to  first  principles,  viz.,  a  close  watch  on  the 
duration  and  circumstances  of  every  success- 
ive operation  in  a  process  of  manufacture, 
with    a   view   to   determining   a   theoretical 

457 


458     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

maximum  of  productive  output.  It  is  curious 
to  observe  that  the  scrutiny  of  successive 
operations  with  this  end  in  view  was  more 
familiar  in  early  days  than  in  later  times. 
In  Babbage's  "Economy  of  Manufactures", 
published  in  1832,  hints  are  given  as  to  the 
precautions  necessary  in  timing  the  details  of 
operations. 

It  must  be  perfectly  evident  to  every 
sober-minded  observer  that  the  ultimate  suc- 
cess of  piece  work,  using  that  term  in  its 
broadest  sense  to  indicate  all  kinds  of  re- 
muneration by  results,  must  depend  upon  the 
possibility  of  finding  ultimate  or  "real" 
bases  for  calculation.  The  objections  to  piece 
work  on  the  part  of  trade  unions  is  founded 
on  the  perception  that,  as  at  present  fixed, 
all  prices  are  to  a  great  extent  arbitrary. 
"When  they  are  offered,  there  is  no  possibil- 
ity of  judging  their  fairness  except  by  trial 
and  error,  or  by  the  exercise  of  that  very 
delusive  quality,  the  practical  man's  judg- 
ment. This,  by  itself,  is  no  great  matter, 
but  it  becomes  overpoweringly  important  in 
relation  to  the  perennial  bugbear  of  the  rela- 
tions between  capital  and  labor — the  cutting 
of  rates,  or,  what  is  even  more  dreaded,  the 
gradual  whittling-down  of  rates. 


TASK   WORK   AND   BONUS  459 

In  engineering  manufactures,  the  enor- 
mous variety  of  pieces  in  shape,  size,  weight, 
and  material,  and  the  great  number  of  differ- 
ent processes  which  can  be  and  are  applied 
to  any  one  piece  before  it  is  finished,  render 
"standard"  price  lists  of  pieces  impossible. 
Consequently  as  matters  at  present  stand 
there  is  some  degree  of  reason  in  the  atti- 
tude of  trade  unionists  towards  piece  work. 
Even  though  as  regards  any  one  shop  there 
may  be  a  fair  and  square  understanding  that 
prices,  once  fixed,  shall  never  be  reduced, 
that  (in  itself  difficult  to  attain  in  practice) 
is  no  safeguard  against  other  firms  in  the 
same  line  fixing  slightly  smaller  prices — a 
process  which  has  a  tendency  to  continue  in 
spite  of  the  efforts  of  the  better  class  of  em- 
ployers, and  the  theory  that  the  best  work- 
men wTill  always  gather  round  them. 

Up  to  the  present  time  all  systems  of  piece 
remuneration  must  be  considered  as  tempor- 
ary and  practical  solutions  of  a  problem  of 
great  importance  —  involving  a  certain 
amount  of  dissatisfaction  at  times,  but  kept 
working  by  the  common-sense  and  fair  deal- 
ing of  the  parties  to  the  bargain.  The  special 
interest  of  the  task-and-bonus  methods  is 
that  they  are  a  considerable  step  forward  to- 


460     SCIENCE   AND   PRACTICE    OF   MANAGEMENT 

wards  a  state  of  affairs  when  most  piece- 
work prices  will  be  referred  to  an  ultimate 
or  real  basis  and  thus  be  beyond  dispute, 
either  at  different  times  in  the  same  shop,  or 
at  the  same  period  in  different  shops;  not 
because  of  the  peculiar  methods  by  which 
payment  is  reckoned,  but  on  account  of  their 
minute  survey  of  the  maximum  possible  pro- 
duction, and  their  enumeration  of  every  fac- 
tor occurring  in  such  production. 

It  is  perfectly  obvious  that  these  new 
methods  are  leading  up  to  an  ultimate  basing 
of  prices  on  these  known  factors.  For  though 
these  factors  are  numerous,  they  are  not  in- 
finite in  number,  and  it  is  only  a  matter  of 
time  before  they  will  become  tabulated  so 
that  the  price  of  any  new  piece  of  work  will 
be  a  simple  aggregate  of  the  prices  of  its 
factors.  When  this  desirable  stage  has  been 
reached,  the  settlement  of  standard  prices 
for  these  factors  between  employers  as  a 
class  and  workers  as  a  class  will  become  quite 
feasible,  and  a  much  higher  degree  of  indus- 
trial peace  will  have  become  possible.  The 
progress  made  of  late  years  shows  that  this 
is  no  fanciful  picture,  but  a  sober  possibility. 
It  seems  certain,  therefore,  that  the  best  in- 
terests of  trade  unions  would  be  furthered 


TASK   WORK   AND   BONUS  461 

not  by  blind  opposition  to  every  kind  of  piece 
work,  bnt  by  an  intelligent  and  friendly  co- 
operation with  all  attempts  to  continue  and 
extend  the  work  of  finding  and  standardizing 
the  nnit  factors  of  operative  prodnction. 

The  Gantt  method  of  piece  remuneration 
consists,  in  essence,  of  what  may  be  termed 
a  truncated  piece-work  price.  It  sets  back 
the  time  limit  in  such  a  way  that  the  early 
stages  of  increased  speed  on  the  part  of  a 
worker  do  not  yield  him  small  results,  but  no 
results  at  all  beyond  his  ordinary  day  wage. 
On  the  other  hand,  when  this  increased  speed 
has,  so  to  speak,  acquired  sufficient  mo- 
mentum, and  has  attained  a  certain  prede- 
termined efficiency,  the  worker  finds  himself 
in  possession,  all  at  once,  of  a  substantial  re- 
ward, the  proportion  of  which,  relative  to  his 
day  wages,  continues  to  be  an  increasing 
quantity  as  long  as  he  continues  to  reduce  the 
allotted  time.  In  the  Gantt  method  a  time 
limit,  or  allowance,  is  set  as  in  all  other  meth- 
ods of  payment  by  results ;  and  precisely  as 
in  ordinary  piece  work,  any  reduction  of  this 
limit  goes  entirely  into  the  pocket  of  the 
worker. 

Thus  if  a  task  of  14  articles  per  day  be 
set  and  the  worker  receives  $2  a  day,  day 


462     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

wages,  then  for  10,  11,  12  or  13  articles  he 
receives  day  wages,  but  on  attaining  14  ar- 
ticles he  begins  to  be  paid  the  bonus  of  (say) 
40  per  cent,  making  the  equivalent  of  a  piece- 
work price  of  20  cents  each,  thus  jumping  to 
$2.80  per  day. 

This  piece-work  price  is  arrived  at  nor- 
mally by  adding  40  percent  to  day  wages,  and 
dividing  by  the  number  of  pieces  determined 
on  as  a  fair  task ;  thus  $2  day  wage,  plus  40 
per  cent,  is  equal  to  $2.80,  which  divided  by 
14  pieces  gives  $0.20  for  each  piece.  If  he 
produces  15,  16  or  more  pieces,  instead  of 
14,  he  receives  15x20=$3.00,  or  16x20= 
$3.20,  etc.,  for  his  day's  output.  In  other 
words,  the  task  price  once  attained,  becomes 
an  ordinary  piece-work  price  and  all  saved 
goes  to  the  man. 

In  all  other  systems  hitherto  examined, 
the  passage  from  day  pay  to  extra  earnings 
is  smooth  and  gradual.  Whatever  premium 
or  reward  is  paid  to  the  worker  is  given  for 
reduction  of  a  time  limit,  and  is  in  strict  pro- 
portion to  the  amount  of  that  reduction.  The 
only  differ ence  between  those  systems  is  in 
the  relation  of  the  reward  of  extra  effort  to 
the  total  works  cost  of  the  job.  And  this 
difference  is  mainly  one  of  degree.    As  re- 


TASK   WORK   AND   BONUS  463 

gards  the  worker  their  influence  is  also  very 
similar.  When  he  attains  the  limit  set,  his 
profits  begin,  and  it  is  open  to  him  to  be  con- 
tent with  any  degree  of  profit,  large  or  small, 
according  to  his  ambition.  The  time  limit 
set  can  hardly  be  described  in  such  cases  as 
a  standard  attainment,  but  rather  as  a  mile- 
stone, because  immediately  on  either  side  of 
it  his  earnings  are  much  the  same,  and  it  is 
only  gradually  that  they  increase  when  he 
has  passed  it. 

In  the  method  we  are  now  discussing,  the 
milestone  is  set  at  the  top  of  a  hill,  and  a 
considerable  reward  is  given  for  getting  up 
to  it.  It  is  true  that  an  increased  reward  fol- 
lows for  further  progress,  just  as  in  the  other 
systems,  but  that  is  not  the  principal  object 
in  view,  which  is  to  set  a  standard  of  attain- 
ment and  not  a  starting  point.  Examination 
of  the  diagram  (page  464)  shows  the  peculiar 
feature  of  this  system  very  plainly.  The 
dotted  line,  representing  actual  earnings, 
corresponds  with  time  taken  until  the  task  or 
limit  is  attained,  when  it  rises  suddenly,  and 
continues  to  diverge  from  the  time-taken  line, 
representing  an  increasing  rate  of  profit  or 
earnings,  as  time  is  reduced. 

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The  Engineering  Magazine 
7.         EFFECT    OF     GA^TT    BONUS     SYSTEM     ON 
EABNINGS    AND    WORKS    COST 


An  allowance  of  100  hours  is  assumed  for  both  systems. 
Diagonal  thick  line  is  wages  cost  of  job.  Dotted  line  shows 
total  receivable  by  man — wages  plus  bonus.  Distance  between 
thick  line  and  dotted  line  on  any  vertical  shows  bonus  for  the 
corresponding  time.  Fine  lines  show  total  works  cost,  made  up 
of  time  taken,   burden  on  time  taken,   and  bonus. 


TASK   WORK   AND   BONUS  465 

made  from  a  study  of  the  diagram.  In  the 
first  place,  the  meaning  of  the  phrase  "a 
truncated  piece-work  price' ',  used  above, 
will  be  made  clear.  It  is  obvious  that  if 
the  dotted  line  representing  earnings  were 
continued  right  across  the  diagram. so  as.  to 
meet  the  line  of  time  taken,  this  diagram 
would  be  precisely  equivalent  to  a  piece-work 
diagram  with  a  time  limit  of  140  price  units. 
Regarded  from  this  point  of  view,  the  Gantt 
system  is  a  method  of  holding  back  the  early 
portion  of  profits  due  to  increased  activity, 
which  on  an  ordinary  piece-work  plan  would, 
from  the  beginning,  go  to  the  worker.  This 
is  confirmed  by  the  works-cost  curves,  which 
fall  sharply  until  the  task  set  is  attained,  then 
rise  suddenly,  and  fall  again  at  a  slower  rate 
than  before,  owing,  of  course,  to  the  inclu- 
sion of  extra  earnings  in  them.  They  are 
precisely  equivalent  to  piece-work  cost 
curves,  except  that  the  latter  fall  regularly 
without  either  the  preliminary  swift  descent, 
or  subsequent  restoration  to  the  normal  by 
the  sudden  rise. 

The  bearings  of  the  Gantt  method  on  works 
cost  and  production  generally  must  now  be 
discussed.  As  regards  expense  burden,  the 
principles  worked  out  in  the  previous  chapter 


466      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

when  dealing  with  piece-work  systems  apply 
to  the  Gantt  method  also.  The  maximum  ef- 
fect on  works  cost  (labor  cost  plus  burden) 
occurs  with  high  burdens.  It  is  not  until 
100  per  cent  burden  occurs  that  works  cost 
begins  to  fall  parallel  with  wages.  At  first 
sight  therefore  it  would  seem  to  be  less  eco- 
nomical than  the  premium  plan. 

But  in  looking  at  the  results  of  the  Gantt 
system  as  shown  by  the  diagram,  it  must 
be  borne  in  mind  that  this  method  sets  a 
standard  of  attainment  and  its  raison  d'etre 
is  largely  fulfilled  when  it  has  been  attained. 
Consequently  the  curves  on  the  right  hand 
of  the  diagram  have  very  little  importance — 
much  less  importance  than  those  in  corre- 
sponding positions  on  the  diagrams  of  the 
other  systems.  The  time  limit  or  task  is  so  set 
that  most  of  the  impulse  given  by  the  method 
takes  place  before  and  not  after  the  limit 
is  attained.  Hence  on  this  system  the  deter- 
mination of  the  task  is  all-important. 

In  Mr.  Gantt 's  book  on  "Work,  Wages  and 
Profits",*  which  must  be  regarded  as  one 
of  the  most  important  contributions  yet  made 
to  the  subject,  the  philosophy  underlying  his 
method  is  brought  out  in  detail.    If  there  is 

*  Work,  Wages  and  Profits  bv  H.  L.  Gantt,  Second 
Edition,   1913. 


TASK   WORK   AND   BONUS  467 

one  tiling  more  evident  than  another  it  is 
that  the  mere  mechanism  of  reward — that  is, 
the  part  of  the  method  capable  of  being  ex- 
pressed in  a  formula  or  a  diagram,  is  the 
least  essential  portion  of  it.  This  is  very 
important  to  understand  and  to  remember, 
because  the  temptation  to  identify  the 
method  with  the  mechanism  of  reward  is 
necessarily  great.  But  to  install  the  bonus 
or  task-limit  system  without  the  rest  of  the 
method  would  be  to  court  disaster  on  a  big 
scale.  Of  all  the  systems  of  remuneration 
yet  examined,  the  Gantt  is  the  most  danger- 
ous in  the  hands  of  the  amateur  organizer, 
who  is  unable  to  view  manufacturing  opera- 
tions as  an  organic  whole. 

The  ultimate  object  of  all  these  systems  is 
to  secure  a  reduction  in  works  cost  by  pro- 
viding some  method  of  stimulating  labor.  In 
all  the  systems  previously  examined,  this  ob- 
ject is  attained  in  a  more  or  less  empirical 
manner.  No  definite  standard  is  in  view  at 
any  time.  The  principle  frequently  recom- 
mended to  those  installing  the  premium  sys- 
tem, viz.,  to  be  generous  with  the  time  limit 
and  parsimonious  with  the  share  or  percent- 
age of  division,  is  a  wise  one  in  the  majority 
of  cases  and  represents  a  cautious  advance 


468     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

into  unknown  fields.  Where  this  principle 
is  adopted,  the  consequences  of  an  error  in 
the  time  limit  are  not  very  serious,  and  are, 
indeed,  reduced  to  a  minimum  on  the  Eowan 
system  with  its  closed  curve  of  share  per- 
centage. On  the  Gantt  system,  however,  an 
entirely  new  principle  comes  into  play,  and 
the  mechanism  of  the  system,  though  pecu- 
liarly adapted  to  its  necessities,  is  quite  sec- 
ondary in  importance. 

The  special  and  admirable  feature  of  the 
Gantt  method  is  that  it  commences  by  an  in- 
quiry into  the  possible  maximum  of  produc- 
tion, and  uses  the  information  thus  gained 
to  set  up  a  standard  of  attainment,  difficult 
perhaps,  and  in  fact  impossible  to  the  un- 
aided worker,  but  just  for  that  reason  more 
than  ordinarily  valuable  because  it  enforces 
the  necessity  and  develops  the  faculty  of  in- 
telligent and  successful  co-operation.  All  the 
previously  examined  systems  confine  their 
attention  to  the  operative  and  work  on  the 
supposition  that  by  the  promise  of  extra  re- 
ward his  movements  will  not  only  be  quick- 
ened, but  his  intelligence  aroused.  That  is 
unquestionably  the  case,  but  how  much  they 
will  be  quickened  or  aroused  is  left  entirely 
to  chance,  for  the  very  good  reason  that  no 


TASK   WOKK   AND   BONUS  469 

one  has  known  (except  the  all-wise  rule-of- 
thumb  and  judgment  man)  what  possibilities 
were  in  sight. 

It  is,  however,  very  much  easier  to  deter- 
mine a  theoretical  maximum  of  production 
than  to  guess  at  what  is  "a  fair  day's  work". 
Given  certain  conditions,  there  is  always  a 
limit  (and  it  is  a  mere  matter  of  observation 
and  calculation)  beyond  which  production 
cannot  possibly  pass.  But  in  determining 
this  theoretical  maximum,  it  is  quickly  seen 
that  its  attainment  depends  on  a  number  of 
auxiliary  conditions  whose  importance  — 
whose  vital  importance  —  is  otherwise  apt  to 
be  neglected.  This  is  precisely  the  point 
where  the  " magic  touch"  comes  in,  where 
the  subtle  difference  of  principle  begins  to 
have  important  practical  results. 

The  older  systems  stimulated  production, 
and  were  well  content  when  they  had  done 
so  appreciably.  As  there  was  a  good  deal  of 
" trial  and  error"  in  their  methods,  they 
were  very  apt  to  rest  on  their  oars  when 
some  progress  had  been  made.  In  fact,  too 
much  progress  became  rather  alarming  as  in- 
dividual items  of  the  payroll  approached  the 
point  of  "double  pay".  When  a  certain  per- 
centage of  increase  had  taken  place,  every- 


470     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

one,  whether  master  or  man,  was  inclined  to 
say  "good  enough ",  for  want  of  knowing  any 
better. 

But  the  moment  that  a  theoretical  stand- 
ard of  maximum  production  is  set  up,  every- 
thing is  changed.  It  is  an  ineradicable  fac- 
tor of  human  nature  to  struggle  towards  a 
definite  ideal — the  real  trouble  of  life  being 
that  few  of  us  get  hold  of  the  right  ideal. 
This  applies  quite  as  much  in  the  prosaic  at- 
mosphere of  the  machine  shop  as  anywhere 
else.  The  inevitable  result  of  discovering  a 
tangible  goal,  a  maximum  standard  of  at- 
tainment, is  that  only  the  lazy  and  incom- 
petent will  be  willing  to  rest  on  their  oars 
after  a  short  spurt  of  advance.  Instead  of 
everyone  exclaiming  "good  enough,"  the 
tendency  will  necessarily  be  for  everyone  to 
exclaim  "might  be  better".  The  stimula- 
tion which  the  older  methods  apply  to  the 
workman  alone  is  shared  by  everyone  con- 
cerned, and,  what  is  most  important,  a  much 
more  intelligent  appreciation  of  the  whole  of 
the  conditions  —  main  and  auxiliary  —  per- 
taining to  successful  production  will  be 
aroused.  Incompetence  necessarily  has  a 
rough  time  when  it  is  visibly  holding  back 
progress  towards  a  definite  and  ascertained 


TASK   WORK   AND   BONUS  471 

goal.  It  will  be  seen,  therefore,  that  the 
psychology  of  the  Gantt  method  is  much 
more  important  than  its  mechanism. 

It  is  true  that  so  far  all  the  progress  that 
has  been  made  is  towards  standardization 
of  actual  machine  work — towards  ascertain- 
ing the  theoretical  maximum  output  of  the 
machinery  and  labor  in  conjunction.  Yet,  the 
relation  of  expense  or  burden  to  production 
is  one  of  the  most  serious  problems  in  the 
attainment  of  a  minimum  works  cost.  It  is, 
perhaps,  inevitable  that  the  importance  of 
setting  up  definite  standards  of  operative 
work  must  be  recognized  before  the  impor- 
tance of  standardizing  indirect  expense  can 
be  driven  home.  But  no  one  who  is  familiar 
with  the  question  can  fail  to  perceive  that 
the  new  view  of  production  given  by  Mr. 
Gantt  lies  in  the  same  straight  line  with  the 
"production-f actor' '  method  of  dealing  with 
expense  burden  advocated  by  the  present 
writer.  In  wholly  independent  fields  they 
both  tend  towards  the  same  end,  and  that  is 
the  predetermination  of  theoretical  efficiency. 
The  tendency  in  both  is  to  consider  each  ma- 
chine as  a  "production  centre''  and  thor- 
oughly to  discuss,  enumerate  and  record  all 
the  conditions  of  its  maximum  successful  op- 


472     SCIENCE   AND    PRACTICE   OF    MANAGEMENT 

eration.  They  both  seek  to  set  up  definite 
standards  of  work,  by  which  the  efficiency  of 
all  similar  machines  wherever  placed  can  be 
judged. 

Obviously  this  is  no  mere  chance  coin- 
cidence. It  represents  the  existence  of  a 
very  definite  trend  in  principles  of  admin- 
istration, inevitable  as  manufacturing  opera- 
tions grow  in  scale  and  complexity.  It  marks 
the  introduction  of  a  higher  order  of  intelli- 
gence into  manufacturing  operations,  viz., 
the  co-ordinating  as  apart  from  the  merely 
directive,  the  staff  officer  as  distinct  from  the 
regimental  commander.  There  is  no  getting 
away  from  this.  The  principle  of  prevoy- 
ance,  of  accurate  predetermination  of  the 
powers  of  production  in  all  their  aspects, 
has  come  to  stay. 

In  this  field  the  work  of  Mr.  Harrington 
Emerson  is  also  well  known.  Here  again  we 
find  a  system  of  payment  of  a  peculiar  char- 
acter which  borrows  its  importance  from  its 
association  with  a  standard  of  theoretical  effi- 
ciency. The  main  difference  between  the 
Emerson  and  Gantt  systems  lies  in  the  nature 
of  the  curve  traced  by  the  "earnings"  line. 
Whilst  the  latter  partakes  of  the  character 
of  a  "truncated"  piece-work  limit,  the  for- 


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The  Engineering  Magazine 
8.       EFFECT    OF    EMERSON    WAGE    SCALE 
ON   EARNINGS  AND  WORKS   COST 


An  allowance  of  100  hours  is  assumed.  Diagonal  thick  line 
is  wages  cost  of  job.  Earnings  line  shows  total  receivable  by 
man — wages  plus  bonus.  Distance  between  thick  line  and  earn- 
ings line  on  any  vertical  shows  bonus  for  the  corresponding 
time.  Fine  lines  show  total  works  cost,  made  up  of  time  taken, 
burden  on  time  taken,  and  bonus 


474     SCIENCE   AND    PRACTICE    OE    MANAGEMENT 

mer  (see  page  473)  is  a  66  per  cent  Halsey 
limit,  pure  and  simple,  at  the  beginning  and 
end  of  its  operation,  but  between  these,  forms 
a  parabolic  curve  (of  which  the  likeness  to 
an  inverted  Eowan  curve  will  be  noticed) 
corresponding  to  a  whole  range  of  Halsey 
limits  as  the  actual  time  taken  is  reduced. 
The  practical  effect  of  the  parabola  is  most 
noticeable  in  the  earlier  stages  of  time  re- 
duction, allowing  only  an  almost  negligible 
bonus  until  the  nominal  limit  called  100  per 
cent  efficiency  is  being  approached. 

In  the  Emerson  system,  also,  the  curves  on 
the  right-hand  side  of  the  diagram  possess 
comparatively  small  importance.  The  whole 
field  of  operation  is  supposed,  as  an  axio- 
matic condition  of  the  adoption  of  the  meth- 
od, to  be  so  exactly  mapped  out  that  no  great- 
reduction  of  the  task  set  is  likely.  The 
psychological  difference  between  the  two 
methods  lies  in  the  absence,  in  the  Emerson 
system,  of  a  sudden  rise  in  earnings.  On  the 
contrary,  earnings  begin  to  grow  when  two- 
thirds  of  the  task  efficiency  has  been  attained, 
although  very  slowly  in  the  earlier  stages. 
The  question  naturally  arises  —  which  of 
these  two  methods  of  approaching  standard 
efficiency  is  best? 


TASK   WOKE  AND  BONUS  475 

No  definite  answer  is  possible,  or  rather 
any  attempted  answer  must  contain  several 
unknown  or  indeterminate  factors.  Person- 
ally, the  clearness  and  definiteness  of  the 
Gantt  standard  seem  to  me  to  offer  a  great- 
er leverage  on  average  human  nature  than 
the  gradual  rise  of  earnings  on  the  Emer- 
son method.  But  in  actual  practice  every- 
thing depends  on  the  personality  of  those 
who  are  in  authority — much  more  perhaps 
than  on  the  workers  themselves.  Probably 
the  Gantt  method  requires  greater  self-con- 
fidence and  a  clearer  survey  of  the  ultimate 
goal  to  be  reached  than  the  other,  but  just 
because  of  its  definiteness  one  may  be  in- 
clined to  suggest  that  in  the  right  hands  its 
success  would  be  more  thorough  and  uni- 
form. 

Considered  in  relation  to  high  burdens,  it 
will  be  seen  from  the  curves  that  the  Emer- 
son works  cost  does  not  differ  to  a  very  great 
degree,  at  any  point,  from  an  ordinary  66 
per  cent  Halsey  premium  works  cost.  The 
higher  the  burden,  the  closer  this  approxima- 
tion becomes.  The  practical  deduction  from 
this  observed  fact  is  that  the  principal  value 
of  these  new  methods  of  remuneration  lies 
in  their   introduction  of  the  "  Standard  of 


476     SCIENCE   AND   PRACTICE    OF   MANAGEMENT 

Efficiency"  idea — that  is,  their  placing  of  the 
task  milestone  at  the  top  of  a  hill,  and  thus 
setting  free  the  tendency  inherent  in  all  hu- 
manity to  attain,  if  possible,  a  goal  that  is 
in  sight. 

In  the  foregoing  examination  of  these  two 
methods  nothing  has  been  said  about  the  re- 
muneration which  is  given  to  other  than 
direct-workers  for  attainment  of  task  or 
standard  efficiency  on  the  part  of  these  lat- 
ter. Yet  it  will  be  obvious  that  bonuses  to 
officials  whose  intelligent  and  active  co-oper- 
ation in  their  respective  spheres  is  neces- 
sary to  enable  the  worker  to  have  an  uninter- 
rupted chance  of  success,  is  a  most  important 
feature  of  these  advanced  methods.  Such 
bonuses  are  not  new  in  themselves,  but  under 
the  older  methods  of  working  have  rarely 
been  found  satisfactory,  leading,  not  infre- 
quently, to  aggravated  forms  of  "driving" 
and  general  unrest.  It  is  only  when  intro- 
duced as  part  and  parcel  of  the  standard  effi- 
ciency or  task  idea  that  they  promise  suc- 
cess, because,  and  only  because,  the  intro- 
duction of  this  idea  leads  to  production  be- 
ing regarded  from  a  co-operative  point  of 
view,  in  which  manual  skill,  machinery  and 
directive  (or  rather  educative)  effort,  have 


TASK   WOKK   AND   BONUS  477 

each  their  appointed  place.  In  other  words, 
the  bonuses  are  given  not  for  "making" 
other  men  increase  their  production,  but  for 
"helping"  them  to  do  so — a  very  different 
ideal,  signifying  entirely  different  personal 
relations  and  a  much  more  progressive  at- 
mosphere. 

It  has  been  shown  above  that,  in  relation 
to  burden  or  establishment  charges,  these 
new  methods  of  remuneration  do  not  present 
any  strikingly  novel  features ;  that  is  to  say, 
they  do  not  introduce  any  new  relationship 
between  the  time  actually  spent  on  the  job 
and  the  overhead  charges  the  job  has  to 
bear.  Nevertheless  the  introduction  of  the 
standard  task  or  efficiency  idea  may  have,  as 
already  briefly  pointed  out,  an  influence  on 
the  point  of  view  from  which  burden  is  re- 
garded. For  if  we  assume  a  standard  task 
and  agree  to  regard  any  failure  to  perform 
it  as  so  much  avoidable  inefficiency,  it  is  evi- 
dent that  we  imply  a  standard  quantity  of 
burden,  whether  the  latter  is  regarded  as  a 
percentage  of  time,  or  wages,  or  is  treated 
on  the  "production-centre"  system  of  ma- 
chine rents.  There  is,  then,  a  double'  degree 
of  inefficiency  in  failure  to  come  up  to  stand- 
ard on  any  job.     Not  only  is  there  a  loss  of 


478     SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

time,  but  what  is  sometimes  even  more  im- 
portant, there  is  an  undue  absorption  of  bur- 
den. The  modern  principle  of  predetermina- 
tion of  standard  time-cost  requires  to  be  sup- 
plemented by  similar  standardization  of 
overhead  burden,  in  order  to  bring  all  the  ele- 
ments of  cost  to  a  focus. 

The  inefficiency  of  a  shop  may  take  three 
principal  directions,  viz. : 

(1)  Wasted  burden  owing  to  idle  ma- 
chinery. 

(2)  Wasted  time  due  to  standard  tasks 
not  being  attained. 

(3)  Unduly  absorbed  burden  on  this  un- 
necessary time. 

Items  (2)  and  (3)  are  of  course  insepar- 
able, and  vary  together.  The  question  is 
complicated  by  the  fact  that  while  (2)  is  an 
obviously  unnecessary  expense,  (3)  on  the 
other  hand  is  a  false  credit;  i.  e.,  it  repre- 
sents an  amount  by  which  burden,  charge- 
able either  against  the  shop  or  against  the 
machine,  has  been  improperly  relieved. 

Space  does  not  admit  of  a  fuller  discus- 
sion of  the  general  relations  of  burden  to 
costs  under  a  system,  such  as  the  Gantt  or 
Emerson,  of  standardized  task  efficiency. 
Enough,  however,  has  been  said  to  show  that 


task  woke:  and  bonus  479 

the  subject  requires  development  if  only  be- 
cause the  mechanism  of  both  systems  shows 
no  changed  relationship  of  time  to  burden, 
although  the  spirit  of  each  system  really 
changes  such  relationship  entirely.  In  other 
words,  predetermination  of  standard  costs, 
depending  as  it  does  on  the  close  applica- 
tion of  scientific  methods  of  analysis  of  the 
elements  of  jobs,  and  the  consequent  accur- 
ate mapping  out  of  all  the  field  of  produc- 
tion, throws,  to  a  considerable  extent,  the 
relations  of  burden  to  cost  into  the  melting 
pot.  For  it  is  obviously  an  incomplete  pro- 
gramme to  have  one-half  of  productive  ex- 
pense accurately  surveyed,  and  to  leave  the 
other,  and  possibly  the  larger  half,  on  the 
old  haphazard  basis. 

At  the  outset  of  this  inquiry  the  question 
of  equivalent  time-limits  on  the  different 
piece-work,  premium  and  bonus  systems  oc- 
cupied my  attention.  It  is  actually  possible, 
and  seemed  useful,  to  determine  these  equiv- 
alent limits,  which  promised  to  afford  a 
method  of  switching  over  from  one  system 
to  another.  Further  examination  has  shown 
that  though  this  is  to  a  great  extent  possible, 
e.  g.,  every  Gantt  limit  at  a  given  rate  of 
bonus  has  an  equivalent  Halsey  limit  at  a 


480      SCIENCE    AND    PRACTICE    OF   MANAGEMENT 

given  rate  of  bonus — nevertheless  to  lay  any 
stress  on  this  point  would  be  mischievous 
and  misleading.  For  as  already  remarked, 
the  mechanism  of  the  new  methods  is  their 
least  important  feature,  and  to  offer  any  de- 
tails which  might  lead  the  unwary  to  think  of 
adopting  the  mechanism  without  the  far  more 
essential  spirit,  would  be  a  poor  service. 

The  moral  to  be  drawn  from  an  inspection 
and  comparison  of  the  diagrams  in  this  and 
the  preceding  article  will  now  be  recogniz- 
able. It  is  that  between  all  these  systems  of 
remuneration  there  is  a  strong  family  like- 
ness, and  that  there  is  not  between  them  as 
great  a  difference  in  principle  as  is  commonly 
supposed.  Fundamentally  and  in  all  essen- 
tial points,  they  attain  closely  related  re- 
sults by  very  similar  paths.  The  differences 
between  them  resolve  into  the  shifting  back- 
wards and  forwards  of  time-limits  and  tasks, 
and  the  greater  or  less  share  which  is  re- 
tained or  given  as  a  reward  for  extra  exer- 
tion. After  a  dispassionate  examination,  the 
closed  curve  of  the  Eowan  system  with  its 
self -protection  against  the  results  of  bad  er- 
rors in  limits  seems  to  me  to  offer  many  ad- 
vantages— considered  merely  as  a  mechan- 
ism of  reivard.    On  the  other  hand,  the  newer 


task  woke:  and  bonus  481 

method  of  standard  task  or  efficiency  exam- 
ined in  the  present  article  must  in  time  super- 
sede all  others  as  to  principle.  The  question 
arises,  however,  wrhether  some  combination 
of  the  Rowan  closed  curve  for  mechanism, 
with  the  standardizing  idea  as  principle,  is 
not  possible,  and  if  possible  whether  it  would 
not  form  a  happy  and  practical  combination. 
Investigation  along  this  line  seems  worth 
while. 


Appendix   IV 
THE   PLANNING   DEPAKTMENT 

HP  HE  term  "Planning  Department"  is  a 
A  comparatively  recent  coinage,  bnt  most 
of  the  functions  that  it  exercises  are  not  in 
themselves  new,  though  it  is  claimed  that 
they  are  rendered  more  efficient  by  being 
joined  under  one  roof.  On  the  other  hand, 
all  of  them  are  not  necessarily  present  in 
any  given  plant. 

The  magnified  importance  attributed  in 
some  quarters  to  the  planning  department 
arises  from  non-appreciation  of  the  fact  that 
it  exercises  three  entirely  different  functions, 
which  have  no  necessary  dependence  on  one 
another.  When  all  these  important  functions 
are  called  by  the  same  name,  it  has  neces- 
sarily rather  a  formidable  appearance.  It 
is  in  fact  a  kind  of  department  store  selling 
different  goods  at  separate  counters.  Such 
a  store  looks  imposing,  but  in  essence  its 
operations  are  no  different  from  those  of  the 
little  corner  store. 
In  its  most  involved  form  the  planning  de- 
483 


484     SCIENCE   AND   PRACTICE    OF   MANAGEMENT 

partment  is  engaged  on  work  that  properly 
belongs  to  the  drafting  room,  some  that  per- 
tains to  a  rate-fixing  department,  and  the  re- 
mainder to  a  stock-tracing  department. 
Neither  of  these  departments,  taken  sepa- 
rately, is  capable  of  running  the  plant  with- 
out other  assistance,  and  it  is  difficult  to  see 
how  the  united  wisdom  of  all  three,  even  if 
combined  within  the  same  four  walls,  can  do 
more  than  settle  the  method  of  doing  work, 
fix  a  price  for  it,  and  keep  the  stock  moving. 
There  is  no  prima-facie  reason  why  these 
three  functions  are  any  the  better  for  being 
centralized,  and  called  by  one  name. 

Whatever  doubt  one  may  feel  is  increased 
by  observing  the  order  in  which  these  func- 
tions must  be  exercised  on  any  piece  of  work. 
They  are  in  no  sense  simultaneous,  but 
strictly  independent.    Thus  we  have: — 

(1)  Settlement  of  what  processes  are  to 
be  performed.  This  is  obviously  antecedent 
to  anything  else,  and  as  has  been  pointed  out 
in  these  pages,  ought  to  be  a  question  aris- 
ing during  the  designing  of  the  piece. 

(2)  Settlement  of  the  piece-work  price  to 
be  paid  for  doing  the  work.  Whether  based 
on  time  study,  or  a  shrewd  guess,  or  by  the 
ordinary  method   of   comparing  with   some 


PLANNING  485 

similar  piece,  this  function  seems  quite  self- 
contained.  It  does  not  even  matter  whether 
the  piece  is  ever  made  or  not,  much  less  how 
it  is  despatched  or  traced — the  piece-work 
price  would  be  just  the  same. 

(3)  The  processes  having  been  deter- 
mined on  and  the  rate  being  fixed  for  each, 
the  only  remaining  thing  is  to  get  it  made. 
This  is  a  pure  matter  of  securing  material 
and  instructions,  marshaling,  despatching, 
or  tracing,  and  its  ease  or  difficulty  depends 
on  the  defmiteness  with  which  the  sequence  of 
processes  was  determined  in  the  first  place. 
It  has  nothing  to  do  with  the  piece  price,  be- 
cause it  might  all  be  day  work  equally  well. 

These  three  functions  having,  therefore, 
well  marked  border  lines— what  is  gained  by 
massing  them  together  and  calling  them  a 
planning  department?  This  is  so  important 
a  matter  that  it  demands  a  separate  discus- 
sion in  this  place. 

Planning  is,  in  essence,  the  exercise  of 
foresight.  Specifically  it  consists  in  adjust- 
ing the  relations  of  things  before  they  hap- 
pen. In  this  sense,  almost  every  business 
step  involves  planning  in  some  degree.  The 
planning  of  buildings,  of  the  product,  of  the 
various  kinds  of  machines  we  propose  to  use, 


486     SCIENCE   AND    PRACTICE   OF   MANAGEMENT 

of  the  different  kinds  of  labor  we  are  to 
engage — all  these  are  examples.  But  in  this 
chapter  we  shall  consider  planning  in  the 
more  restricted  sense  of  regulation  of  pro- 
duction. 

Very  brief  consideration  of  the  subject  will 
show  that  planning  must  be  a  very  elastic 
term.  The  methods  that  would  be  appropri- 
ate to  a  machine  works,  handling  thousands 
of  parts  as  to  variety,  and  millions  as  to  num- 
ber, such  parts  running  through  perhaps  ten 
to  twenty  processes  each,  would  be  totally 
inapplicable  to  a  textile  mill  or  a  shoe  fac- 
tory, because  it  must  be  laid  down  as  a  prime 
rule  for  planning  systems  that  they  must  not 
develop  more  complexity  than  the  needs  of 
the  case  require.  Where  there  are  only  two 
alternatives  to  action,  we  do  not  require  such 
complex  mechanism  to  control  it  as  when 
there  are  twenty  alternatives. 

A  second  principle,  worthy  of  careful  ob- 
servance, is  that  planning  systems  should  be 
staffs  and  not  crutches.  They  should  not 
tend  to  crush  self-reliance  and  initiative,  and 
reduce  everyone  to  a  mere  pinion  in  a  ma- 
chine. They  should  be  in  the  nature  of  sign- 
posts pointing  the  way,  but  their  usefulness 
should  not  be  stultified  if  by  any  chance  it  is 


PLANNING  487 

impossible,  for  some  unforeseen  reason,  to 
take  that  particular  way. 

These  remarks  are  necessary  because  in 
some  quarters  it  is  supposed  that  planning 
is  a  new  art,  based  on  newly  discovered  prin- 
ciples. This  is  erroneous.  It  is  only  the 
name  that  is  comparatively  new — the  func- 
tions exercised  under  this  new  name  are  not 
at  all  new.  No  new  principles  of  any  large 
importance  have  been  developed  of  recent 
years,  though  particular  combinations  of  the 
planning  function  have  been  put  forward  and 
wide  claims  made  for  them.  The  fact  is, 
however,  that  no  combination  has  any  pre- 
eminent value  —  the  planning  arrangements 
suitable  for  any  particular  business  are 
really  among  the  most  thoroughly  individual 
kinds  of  organization  that  can  be  imagined. 
For  this  reason  we  shall  refrain  from  de- 
scribing any  one  combination,  but  confine  our 
attention  to  trying  to  indicate  the  normal 
principles  underlying  the  function  of  plan- 
ning, or  controlling  the  course  of  production. 

The  evolution  of  the  component  or  part 
(where  a  product  consists  of  components  that 
are  made  separately  and  afterwards  as- 
sembled) begins  in  the  drafting  room.  In 
many  industries,  of  course,  there  is  no  draft- 


488     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

ing  room  nor  anything  corresponding  to  it. 
The  shape  and  treatment  of  the  product  are 
determined  not  by  sketches  on  paper,  nor 
even  by  models,  but  by  the  design  of  the 
machinery,  as  for  instance  in  cotton  spinning. 
In  such  cases,  this  first  stage  of  planning 
really  is  transferred  to  the  machine  itself 
and  embodied  in  it.  Where  machines  will 
only  do  one  thing  and  do  it  in  one  way, 
it  is  evident  that  this  first  stage  in  the  evolu- 
tion of  the  assembled  part  must  be  wholly 
missing.  But  in  most  assembling  industries 
the  first  stage  is  that  of  a  design  on  paper 
or  a  model  of  the  actual  article. 

As  has  been  already  suggested  in  former 
chapters  the  process  of  designing  the  com- 
ponent offers  the  great  field  for  foresight.  It 
is  here  that  our  more  or  less  intelligent  plan- 
ning will  make  the  greatest  economic  differ- 
ence. The  drafting  room  is  sometimes 
claimed  to  be  the  brain  of  the  factory,  but  it 
does  not  always  succeed,  and  in  many  cases  is' 
not  permitted  to  succeed,  in  being  as  wise  a 
brain  as  it  might  be.  The  fault,  however,  gen- 
erally lies  not  with  the  designer  but  with  the 
traditions  of  the  plant. 

As  a  general  principle  the  more  complete 
the  consideration  given  to  the  component  at 


PLANNING  489 

this  stage  of  its  career,  the  less  will  be  the 
necessity  for  complex  arrangements  at  a 
later  stage.  But  the  amount  of  considera- 
tion that  it  is  possible  to  give  usefully  will 
depend  entirely  on  the  nature  of  the  indus- 
try— that  is,  it  will  be  in  proportion  to  the 
number  of  alternatives  which  will  be  pre- 
sented during  the  processes  of  manufacture. 
In  the  simpler  cases,  say  for  example  the 
manufacture  of  a  switch,  there  is  very  little 
opportunity  for  the  exercise  of  foresight,  be- 
yond the  designing  of  suitable  press-tools, 
and  the  selection  of  stock  patterns  of  such 
things  as  screws,  handles,  pins,  etc.  For  the 
rest,  it  is  probable  that  the  use  of  certain 
machines  will  be  indicated  by  the  form  of 
the  tools  provided,  and  no  alternatives  of 
operation  can  arise  in  the  shops.  In  such  a 
case  it  is  obvious  that  elaboration  of  plan- 
ning details  would  be  foolish  and  econom- 
ically unsound. 

The  opposite  case  to  this  is  that  of  a  fac- 
tory making  a  product,  say  for  example  a 
typewriter,  consisting  of  a  very  large  number 
of  parts,  many  of  which  go  through  a  long 
series  of  processes,  and  some  of  which  may 
be  manufactured  in  several  different  ways. 
The  case  is  still  further  complicated  where 


490     SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

there  are  several  varieties  of  some  of  the 
parts,  ail  very  similar  in  appearance,  yet  not 
precisely  alike  but  demanding  differences  in 
processing  at  some  point  of  their  career. 

Let  us  consider  what  this  complexity  of 
product  actually  signifies  in  relation  to  the 
possibility  of  planning  our  operations  in  ad- 
vance. In  particular  we  must  keep  in  mind 
the  desirability  of  separating  the  problems 
of  Division  of  Effort  from  those  of  its  sub- 
sequent co-ordination.  To  confuse  or  mix 
these  is  to  introduce  needless  confusion. 

As  has  already  been  shown,  design  really 
has  two  independent  aspects — design  for  use, 
and  design  for  economical  manufacture. 
These  may  sometimes  clash,  in  which  case 
the  former  aspect  necessarily  dominates. 
But  in  a  general  way  much  good  will  come 
of  an  attempt  by  the  designer  to  keep  the 
method  of  manufacture  steadily  in  view 
whilst  the  shape  and  material  of  the  piece 
are  germinating  in  his  mind.  The  possi- 
bility of  economy  at  this  stage,  again,  will 
depend  on  the  existence  of  alternatives.  If 
the  piece  must  be  of  a  certain  shape  and 
dimension,  and  of  a  particular  material,  there 
is  nothing  more  to  be  said  on  that  score,  but 
in  how  many  instances  is  this  absolutely  the 


PLANNING  491 

case  ?  It  more  frequently  happens  that  there 
is  at  least  some  latitude  in  one  or  other  of 
these  respects,  and  a  very  slight  modification 
of  design  may  mean  all  the  difference  be- 
tween difficult  chucking  or  holding,  simul- 
taneous or  separate  drilling,  hard  or  easy 
access  of  the  tool  and  so  forth.  Even  w-here 
the  conditions  are  absolutely  prescribed  by 
use,  a  lug  or  ear  added  to  the  design  for 
subsequent  removal  may  make  all  the  differ- 
ence between  costly  handling  and  the  reverse. 

These  are  merely  instances  of  the  kind  of 
foresight  that  is  possible  to  the  designer. 
They  might  be  multiplied  to  any  extent,  be- 
cause it  is  or  should  be  the  duty  of  the  de- 
signer to  picture  to  himself,  not  only  the  fin- 
ished component,  but  the  same  component  at 
all  its  intermediate  stages  of  manufacture. 
In  no  respect  is  this  more  necessary  than 
in  regard  to  specifying  the  necessary  degree 
of  accuracy  in  machining,  a  subject  much 
neglected,  and  of  which  the  neglect  is  ex- 
tremely costly.  To  issue  shop  drawings 
without  specifying  limits  and  fits  is  either  to 
cause  unnecessary  expenditure  in  attaining 
unnecessary  refinement,  or  is  prolific  of 
costly  hand  fitting,  and  spoilages. 

In  modern  manufacturing  the  design  can 


492     SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

hardly  be  said  to  be  complete  unless  the  nec- 
essary jigs  and  fixtures  to  promote  its  manu- 
facture are  considered  at  the  same  time.  Fre- 
quently this  branch  of  work  is  separated 
from  design  of  components,  and  placed  in 
the  hands  of  a  separate  department,  or  in  a 
so-called  planning  department  which  is  con- 
sidered as  more  distinctively  a  "shop"  de- 
partment than  the  drafting  room.  This 
seems  a  distinctively  retrograde  step,  and  the 
first  stage  on  the  path  to  needless  complexity 
of  organization  and  routine.  Design  in  all 
its  branches  is  an  entirely  separate  class  of 
effort  from  manufacture.  It  cannot  be  too 
rigorously  kept  as  such.  The  place  to  apply 
cool  and  deliberate  consideration  of  all  the 
elements  of  a  component,  including  the  ques- 
tion of  how  it  is  to  be  made,  is  within  the  four 
walls  of  the  drafting  room.  Only  there  can 
necessary  modifications  be  wrought  into  the 
design,  till  it  emerges  as  well  adapted  to 
its  purpose,  viz.,  to  get  made  as  cheaply  as 
is  compatible  with  its  subsequent  efficiency  of 
use. 

The  question  where  the  function  of  design 
begins  and  ends  is  one  of  the  first  we  must 
ask,  if  we  are  to  keep  it  clear  of  the  other 
forms  of  activity.    Briefly,  it  begins  with  the 


PLANNING  493 

designing  of  the  component,  and  should  end 
with  specification  of  the  way  to  make  it,  in- 
cluding the  subsidiary  design  of  all  jigs  and 
fixtures,  and  the  clear  statement  of  all  limits 
and  fits.  This  conception  of  a  design  may  be 
likened  to  that  of  a  kite  with  a  long  tail.  The 
great  triangular  body  of  the  kite  is  the  im- 
portant thing,  but  the  subsidiary  pieces  of 
its  tail  are  necessary  to  enable  it  to  fly.  The 
kite  is  not  complete  without  the  tail.  Sim- 
ilarly, before  we  get  perfect  flight  we  may 
have  to  modify  the  tail  pieces,  and  even  'to 
trim  the  body  itself. 

Designs  are  rarely  perfect  creations  from 
the  first.  Defects  may  be  obvious,  or  they 
may  not  be  disclosed  save  through  experi- 
ence. This  applies  both  to  the  design  for 
use  and  the  design  for  manufacture.  Our 
main  body — the  shape  and  dimension  of  the 
piece  itself — may  not  be  capable  of  improve- 
ment; yet  the  tail,  that  is,  the  pre-arranged 
methods  of  manufacture,  may  be  discovered 
to  be  susceptible  of  advantageous  change. 

What  does  this  suggest? 

It  suggests  (1)  that  the  drafting  room 
should  be  in  closer  touch  with  the  shops  than 
is  common  at  present,  and  that  one  or  more 
of  its  members  should  be  expert  in  produc- 


49-J:     SCIEXCE   AXD   PRACTICE    OF   MANAGEMENT 

tion;  (2)  that  where  repetition  work  is  in 
question,  each  design  should  be  tried  out  and 
tested,  and  if  necessary  sent  back  for  modifi- 
cation by  a  special  department  attached  to 
the  drafting  room,  before  the  design  is  finally 
adopted  and  embodied  in  standard  shop  in- 
structions. This  checks  the  design  for  effi- 
ciency of  manufacture,  as  a  drawing  is 
checked  for  various  kinds  of  errors  before  it 
leaves  the  drafting  room. 

In  many  industries  all  the  foregoing  may 
be  taken  for  granted.  The  design  and  the 
method  by  which  the  article  will  be  made 
are  so  intimately  connected  that  one  implies 
the  other.  In  designing  a  shoe  of  a  certain 
type  the  whole  range  of  machines  and  proc- 
esses that  will  be  necessary  are  implied  in 
the  design.  There  is  very  little  choice  in  the 
matter.  Perhaps  the  larger  half  of  industry 
is  in  this  position,  the  planning  problem  be- 
ing thereby  greatly  simplified,  and  the  funda- 
mental error  of  trying  to  tie  up  some  of  the 
functions  of  design  with  those  of  organiza- 
tion in  a  "planning  department"  is  less 
likely  to  be  made.  For,  when  the  design  and 
all  its  accessory  implications  such  as  jigs, 
fixtures,  and  methods  of  manufacture  are 
settled,  planning  becomes  simply  a  question 


PLANNING  495 

of  co-ordinating"  the  flow  of  work  and  the  in- 
structions. 

It  is  sometimes  claimed  that  an  important 
part  of  the  work  of  a  planning  department 
is  the  supervision  or  at  least  the  checking 
of  the  "feed  and  speed"  of  the  machines  em- 
ployed. Except  as  an  attempt  to  introduce 
complexity  and  make  the  planning  depart- 
ment take  responsibilities  that  do  not  belong 
to  it  this  does  not  seem  an  advantageous 
move.  It  is  an  idea  that  could  only  have 
arisen  in  a  machine  shop.  That  it  has  ever 
been  attempted  is  attributable  to  the  ignor- 
ance of  machine  capacity  so  universal  in  ma- 
chine shops,  but  in  my  opinion  the  remedy  is 
at  least  as  bad  as  the  disease.  In  many  in- 
dustries the  necessity  does  not  arise,  since 
the  speed  of  machines  is  either  not  variable 
at  all,  or  only  within  limits  well  understood 
by  every  one  handling  them.  No  one  would 
dream  in  such  cases  of  writing  out  elaborate 
"schedules"  to  control  machine  operation. 
In  machine  shops  the  remedy  for  improper 
speeds  and  feeds,  as  pointed  out  in  a  former 
chapter,  is  not  an  attempt  to  control  them 
from  an  office,  but  a  close  shop  study  of  the 
properties,  capacities  and  duties  of  machines 
and  a  generous  training  of  the  shop  opera- 


496     SCIENCE   AXD   PRACTICE   OF   MANAGEMENT 

tives  in  this  elementary  but  much  neglected 
branch  of  their  proper  work. 

Relegating  the  control  of  ''feeds  and 
speeds"  to  where  they  belong,  viz.,  to  the 
shop  itself,  and  considering  the  design  of 
components  as  what  it  truly  is,  viz.,  a  wholly 
independent  field  of  effort,  we  are  left,  as 
stated  above,  with  co-ordination  of  the  flow 
of  work  and  instructions,  as  the  normal  and 
real  field  of  what  may  be  called  "planning" 
— that  is,  keeping  things  moving  in  an  effi- 
cient way.  This  question  has  been  so  fully 
covered  in  previous  chapters  that  but  little 
remains  to  be  said  in  amplification. 

In  every  industry,  good  store-keeping  con- 
trol is  the  first  thing  to  be  secured.  It  does 
not  so  much  need  to  be  elaborate  as  to  be 
thorough.  That  is  to  say,  that  complex  card 
indexes  and  mnemonic  symbols  of  alarming 
complexity  are  not  so  important  as  compe- 
tent men  to  handle,  price,  issue  and  watch  the 
multitudinous  details  of  which  store-keeping 
is  often  made  up.  Very  frequently  the  store- 
keeping  department  is  starved  of  good  men, 
and  this  is  particularly  the  case  where  ex- 
ecutives have  absorbed  the  idea  that  "sys- 
tem" will  run  a  plant  by  itself.  No  econ- 
omy is  more  foolish  than  this,  since  incom- 


PLANNING  497 

petent  store  keeping  can  not  only  bring 
about  direct  loss,  but  by  failure  to  have  on 
band  the  stipulated  stocks  may  derange  and 
tie  up  important  orders.  The  store  keeper 
should  be  more  than  a  bright  clerk ;  he  should 
have  more  than  a  passing  acquaintance  with 
the  trade,  or  with  the  lines  of  product  han- 
dled. Otherwise  inventories  will  generally  be 
found  to  be  unsatisfactory,  and  the  nicely 
written  "records"  full  of  farcical  absurdities 
when  an  attempt  is  made  to  reconcile  them 
with  actual  stock  surveys. 

In  regard  to  the  circulation  of  materials 
from  process  to  process  in  the  shops,  a  mat- 
ter on  which  great  claims  have  been  set  up 
by  certain  schools  of  management  of  late 
years,  methods  based  on  the  principle  of 
"what  is  happening"  rather  than  on  the  idea 
that  we  can  force  things  to  happen  will  com- 
monly give  the  most  practical  results. 
Neither  method  implies  laxity  or  a  "go  as 
you  please"  atmosphere,  but  the  first  is  obvi- 
ously much  less  likely  to  tangle  up  than  the 
second.  Both  methods  should  be  applied 
graphically — that  is  to  say,  that  at  one  or 
more  points  there  should  be  control  stations 
at  which  it  should  be  possible  to  ascertain 
precisely  the   position  of  every  component 


498      SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

within  the  sphere  of  such  station.  Combined 
with  the  principle  of  '"due  dates''  referred 
to  in  the  third  article,  very  close  control  on 
the  movements  of  material  should  be  main- 
tained. 

In  some  industries  the  question  of  "load- 
ing" is  much  more  important  than  in  others. 
By  "loading"  is  meant  the  ascertainment  of 
just  how  far  the  capacity  of  the  factory  is 
engaged  ahead,  and  consequently  what  is  the 
earliest  date  at  which  deliveries  may  be 
promised.  This  problem  is  one  which  has 
no  general  solution.  In  some  cases  it  may 
be  necessary  to  ascertain  the  loading  of  every 
individual  machine,  or  at  the  other  extreme, 
the  capacity  of  the  whole  plant  may  be  taken 
as  one  unit,  and  the  loading  merely  ascer- 
tained as  so  many  days'  work  per  order,  or 
so  many  orders  per  day.  Some  fifteen  years 
ago  I  saw  in  Europe  a  very  perfect  system 
of  controlling  deliveries,  employed  by  a  firm 
making  heavy  machinery,  in  which  the  load- 
ing of  the  plant  was  indicated  graphically 
and  every  week  photographs  were  taken  of 
the  indicator.  These  photographs  were 
placed  in  the  hands  of  the  travelling  men, 
who  were  thus  enabled  to  promise  deliveries 
with  accuracy  and  confidence.    The  nature  of 


PLANNING  499 

the  product,  however,  lent  itself  peculiarly 
to  this  device,  and  it  is  not  very  generally 
adaptable. 

Becapittjlation 

The  chief  object  of  planning  in  advance 
is  to  secure  efficiency  in  things  as  they  hap- 
pen. Whilst  a  principal  field  of  planning 
is  the  securing  of  co-ordination,  that  is,  ar- 
ranging that  events  should  happen  in  the 
right  way  at  the  right  moment,  it  also  re- 
fers to  the  securing  of  as  great  perfection 
as  possible  in  certain  separate  fields  of  ef- 
fort. 

Planning  may  usefully  be  carried  out  in 
the  following  departments  of  effort,   viz. : — 

(1)  The  design  of  components,  both  as  re- 
gards their  design  for  use  and  their  design 
for  manufacture;  the  careful  consideration 
of  how  each  component  is  to  be  made,  and 
the  design  of  the  necessary  jigs  and  fixtures 
to  be  used  in  making  it.  The  process  of  de- 
signing a  component  can  therefore  be  car- 
ried out,  where  necessary,  or  economically 
desirable,  up  to  and  including  the  specifica- 
tion of  the  operations  and  the  class  of  ma- 
chine to  be  used.  But  where  this  is  the  case, 
the  design  should  not  be  officially  adopted  un- 


500     SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

til  (1)  it  has  been  criticized  by  the  shop  offi- 
cials and  (2)  where  the  work  is  of  a  small 
class,  actually  tested  out  by  a  department 
devoted  to  such  verifications.  No  design 
should  be  regarded  as  having  a  sacrosanct 
character,  but  as  tentative,  until  a  better  de- 
sign has  been  suggested  and  accepted. 

(2)  The  flow  of  materials.  Since  the  char- 
acter of  the  flow  of  work  in  a  shop — whether 
it  is  moving  in  a  thin,  fast  stream,  or  in  ir- 
regular waves,  being  checked  here  and  run- 
ning short  there — is  a  matter  of  the  utmost 
economic  interest,  two  things  must  be  pro- 
vided for.  One  of  these  is  such  a  system  of 
control  over  the  stores,  including  the  pur- 
chasing arm,  that  material  shall  always  be 
at  hand  when  required  by  the  shop,  and  this 
should  be  arranged  without  locking  up  too 
great  an  amount  of  capital  in  materials.  The 
other  is  that  the  loading  of  machines  should 
be  carefully  watched.  By  ' ' loading' '  is  meant 
the  amount  of  work  that  is  required  from 
each  machine  in  reference  to  time.  A  "load- 
ing gauge' '  system  should  be  adopted  wher- 
ever the  nature  of  the  work  permits,  so  that 
the  future  deliveries  of  each  machine,  bar- 
ring breakdowns,  may  be  predicted  with  suffi- 
cient   accuracy.      Attention    to    these    two 


PLANNING  501 

points,  if  successfully  applied,  will  go  far  to- 
wards ensuring  a  steady,  fast  stream  of  work 
throughout  the  plant,  with  an  accompanying 
fidelity  to  promises  of  delivery. 

The  control  of  movements  from  process 
to  process  is  best  attained  by  methods  which 
enable  a  graphic  record  to  be  set  up  at  one  or 
more  control  stations,  such  record  being 
closely  associated  with  "due  dates"  at  which 
each  stage  of  manufacture  should  be  passed. 
Every  failure  to  come  up  to  expectations  as 
to  these  dates  is  to  be  promptly  followed  up, 
and  the  missing  material  urged  forward. 
Such  a  plan  is  simple,  not  liable  to  derange- 
ment, and  independent  of  the  working  of 
other  departments.  The  shop  as  a  whole  can 
be  induced  to  take  an  interest  in  such  an  in- 
dicator, and  to  take  pleasure  in  keeping 
ahead  of  the  scheduled  dates  where  these  are 
carefully  and  sensibly  allotted. 

(3)  The  control  of  quantities.  Based 
upon  a  careful  study  of  the  normal  flow  of 
materials,  which  is  in  its  turn  controlled  by 
the  loading  capacity  of  the  machines,  a  close 
grip  on  the  question  of  quantities  may  be 
maintained.  In  some  businesses  this  is  much 
more  important  than  in  others,  but  still  a 
large  number  of  modern  businesses  are  de- 


502     SCIENCE  AND   PRACTICE   0¥    MANAGEMENT 

pendent  on  producing  varying  quantities  of 
regular  products  in  such  a  way  that  orders 
can  be  fulfilled  with  fair  promptitude,  and 
yet  but  little  finished  stock  is  carried.  The 
control  of  quantities,  therefore,  determines 
the  character  of  the  products  actually  occu- 
pying the  shop  at  any  moment,  and  there- 
fore the  possibility  of  meeting  future  de- 
mands in  a  reasonable  period.  Control  of 
quantities  is  therefore  an  important  part  of 
planning,  and  its  main  secret  of  success  lies 
in  knowing  just  what  the  plant  can  do  in  a 
given  time  —  that  is,  in  other  words,  how 
much  load  each  machine  can  bear  in,  say,  a 
week.  This  in  the  first  place  is  obviously  a 
matter  of  arrangement  with  the  commercial 
arm,  for  the  settlement  of  a  policy  as  to 
quantities  of  each  kind  of  product  which  shall 
be  produced  periodically.  They  may  vary 
from  season  to  season  in  many  instances. 

(4)  The  observance  of  "speeds  and 
feeds '  \  This  work  should  be  considered  not 
as  a  part  of  planning,  but  as  belonging  to  the 
art  and  craft  of  metal  working,  in  the  case 
of  a  machine  shop.  If  the  knowledge  of  the 
right  use  of  machine  tools  is  at  such  a  low 
ebb  that  the  shop  cannot  be  trusted  in  this 
matter,  the  remedy  obviously  lies  not  in  an 


PLANNING  503 

involved  and  complex  system  which  neither 
broadens  nor  seeks  to  broaden  the  operator's 
knowledge  or  experience,  but  in  study  of  ma- 
chines and  training  of  machine  operators. 
This  is  the  only  way  in  which  the  individnal  's 
psychological  reaction  with  his  work  can  be 
fostered  and  assisted — a  reaction  which  is 
wholly  ignored  by  those  who  wish  to  rule 
shop  operation  by  rote.  To  admit  that  a 
man's  nerves  and  temperament  have  any 
place  in  manufacturing  operations  shatters, 
of  course,  the  whole  position  of  the  "plan- 
ning department"  fetish,  but  it  will  have  to 
be  admitted  and  recognized  sooner  or  later. 
In  any  case,  a  planning  department  should 
be  concerned  with  the  changeable  events  and 
affairs  of  routine  manufacture  and  not  with 
the  fixed  ones.  If  it  is  considered  necessary 
to  settle  in  advance  not  only  the  precise 
methods  of  manufacture,  but  the  speeds, 
feeds,  cuts,  and  time  allowances,  this  is  cer- 
tainly much  more  closely  allied  to  the  design- 
ing function  than  to  the  planning  function. 
Highly  technical  considerations  are  in- 
volved, but  these  considerations  are  not  sub- 
ject to  variation  in  any  arbitrary  or  sudden 
manner.  The  manufacture  of  a  component 
should  he  discussed,  as  mentioned  above,  at 


504     SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

the  time  the  design  is  being  put  into  final 
shape.  This  is  also  the  time  to  make  intelli- 
gent comparisons,  and  consequently  intelli- 
gent use,  of  speeds,  feeds  and  cuts,  from 
which  time  allowances  are  a  natural  deduc- 
tion. This  kind  of  work  may  be  specialized, 
of  course,  but  it  should  not  be  made  too  in- 
dependent or  given  greater  authority  or 
prominence  than  it  deserves.  "Where  it  is 
necessary  or  advisable  to  do  it  at  all,  it 
should  be  considered  as  one  of  the  elements 
of  design  for  manufacture,  since  it  is  entirely 
antecedent  to  all  other  planning  operations — 
they  follow  it,  it  does  not  depend  on  them. 
Finally,  the  whole  question  of  the  right  use 
and  understanding  of  machine  capacity  is 
involved  here,  as  pointed  out  in  Chapter  XV. 
It  will  be  seen  from  the  foregoing  that  the 
planning  of  shop  work  is  the  art  of  keeping 
things  moving  in  an  efficient  way.  It  has 
nothing  to  do  with  the  efficiency  of  design, 
nor  with  the  efficiency  of  operation.  It  is 
one  of  the  sub-departments  of  control  and 
that  particular  sub-department  concerned 
with  movements  of  product.  It  controls  the 
supply  of  the  raw  material,  conducts  it  into 
the  shops,  and  "loads"  the  machines  with  it 
— actual ' '  planning ' '  being  the  intelligent  ad- 


PLANNING  505 

justment  of  the  productive  capacity  of  the 
machines  to  the  work  to  be  performed,  time 
being  a  factor  of  the  result.  In  its  broadest 
sense  planning  has  to  regulate  the  organic 
relations  of  production  centers,  of  the  in- 
direct services  with  these  centers.  It  has  to 
bring  about  correct  proportioning  of  the 
different  classes  of  productive  activity,  and 
to  observe  how  they  are  being  maintained 
and  served.  It  controls  necessarily  all  the 
stores  and  transport  services,  and  if  suit- 
able records  are  kept  and  a  competent  man 
is  in  charge,  very  important  observations 
as  to  when  and  where  modifications  in  the 
lay-out  and  the  transport  arrangements  are 
necessary  should  be  forthcoming  from  time 
to  time. 


Appendix  V 
SOME  AXIOMS   OF  ADMINISTRATION 

1.  Transfer  of  Skill 

2.  Interchangeability 

3.  Output  and  Cost 

4.  Burden  and  Cost 

5.  Capital  and  Cost 


Appendix  V 

SOME  AXIOMS   OF  ADMINISTRATION 

1.     The  Transfer  of  Skill 

Q  OME  authorities  have  considered  that  the 
^  transfer,  embodiment,  or  storage  of  skill 
which  takes  place  when  we  design  a  machine 
to  perform  work  hitherto  done  by  skilled 
labor,  amounts  to  a  regulative  principle  in 
industry.  This  view  was  taken  by  the  ma- 
jority report  of  the  American  Society  of  Me- 
chanical Engineers  referred  to  in  the  au- 
thor's Preface,  and  has  been  adopted  also  by 
Prof.  Dexter  Kimball,*  who  has  provided  an 
excellent  illustration  of  the  idea  by  consider- 
ing the  drilling  of  a  number  of  plates  with 
four  holes  in  each,— it  being  requisite  that 
the  holes  should  correspond  exactly  in  all  the 
plates.  This  would  be  a  task  that  would  tax 
the  skill  of  the  best  mechanic,  and  would  also 
be  a  long  and  costly  operation.  But  the  skill 
possessed  by  the  mechanic  can  be  transferred 

*See  Principles  of  Industrial  Organization,  page  10  etc. 
509 


510     SCIENCE  AND   PRACTICE   OF   MANAGEMENT 

to  a  jig,  and  stored  or  embodied  in  it,  so  that 
any  number  of  pieces  can  be  drilled  exactly 
alike  by  applying  the  jig  to  them.  The  drill- 
ing can  be  done  by  comparatively  unskilled 
labor,  and  in  a  much  shorter  time. 

Similarly,  in  many  industries,  including 
the  textile  trades  and  shoe  manufacturing, 
the  skill  formerly  exercised  by  the  craftsman 
has  not  only  been  divided  into  a  number  of 
entirely  separate  operations,  but  has  been 
transferred  to,  or  stored  and  embodied  in  the 
machines  themselves.  Of  course,  in  these  in- 
stances, as  in  the  case  of  the  drilling  jig,  this 
does  not  imply  that  no  skill  at  all  is  required 
to  operate,  but  that  a  less  degree  of  skill 
suffices.  In  some  cases,  however,  as  in  the 
case  of  automatic  screw  machines,  every  par- 
ticle of  the  original  skill  required  to  perform 
the  difficult  operation  of  hand-turning  of 
screws,  is  transferred  to  the  machine  and 
stored  in  it.  This  is,  in  fact,  the  condition 
toward  which  all  inventive  progress  tends. 

As  regards  administration,  however,  it  is 
very  questionable  whether  transfer  of  skill 
can  be  ranked  as  a  guiding  or  regulative 
principle.  It  is  at  any  rate  not  a  principle 
of  universal  application,  like  those  already 
discussed.    It  is  a  tendency  in  industry,  but 


AXIOMS    OF    ADMINISTRATION"  511 

not  a  rule  of  administration.  As  a  matter 
of  fact  it  has  economic  limits,  which  it  is  be- 
yond our  province  to  discuss  here.  We  need 
only  mention  the  fact  that  specialized  appli- 
ances are  dangerously  subject  to  obso- 
lescence, and  that  while  it  may  be  possible 
to  make  a  jig,  it  is  not  always  economically 
profitable  to  do  so. 

From  the  administrative  point  of  view, 
therefore,  no  mandatory  principle  as  to  the 
transfer  of  skill  can  be  laid  down.  We  can- 
not rule  that  it  should  be  employed  in  every 
case  where  it  is  possible  to  apply  it.  All  we 
can  say  is  that  it  can  be  applied,  and  there- 
fore that  the  advantage  of  applying  it  should 
always  be  carefully  studied,  pro  and  con. 
These  considerations  lead  us  to  place  it,  not 
as  a  Law  of  Effort,  but  as  the  first  axiom 
of  administration,  in  the  following  form : — 

2.  Skill  Can  Be  Transferred  to  and  Embodied 
or  Stored  in  Appliances. 

H.     Inteechangeability 

Closely  connected  with  the  use  of  jigs,  is 
the  common  problem  of  the  interchangeable 
part.  Here,  again,  we  have  a  question  that 
is  by  no  means  of  universal  application,  for 


512      SCIENCE   AND   PRACTICE   OF   MANAGEMENT 

it  applies  only  to  particular  classes  of  indus- 
tries. We  cannot  speak  of  interchangeable 
sugar  or  pig-iron,  but  we  can  speak  of  inter- 
changeable parts  of  a  watch,  a  motor,  or  any 
other  mechanism.  Now  the  decision  as  to 
how  far  a  manufacture  shall  be  carried  on 
on  the  lines  of  interchangeability  is  not, 
properly  speaking,  a  question  of  administra- 
tion at  all.  It  is  a  question  of  policy,  and  be- 
longs to  the  Determinative  element  in  man- 
agement spoken  of  in  the  preface.  Inter- 
changeability costs  money,  and  this  largely 
determines  its  application.  To  make  parts 
of  motors  interchangeable  may  be  worth 
while,  to  do  the  same  for  iron  bedsteads  or 
bureau  drawers  would  be  less  advisable.  It 
is  no  principle  of  administration,  since  we 
cannot  put  it  in  a  mandatory  form.  We  have 
not  yet  arrived  at  the  point  when  we  can 
say  that  interchangeability  should  always  be 
aimed  at,  wherever  physically  possible.  It 
remains,  therefore,  merely  an  axiom,  the  ap- 
plication of  which  must  depend  on  circum- 
stances which  are  commonly  regulated  by 
conditions  of  marketing  outside  the  factory. 
This  axiom  can  be  put  thus : — 

3.  Interchangeability   of   Parts   Is   Frequently 
Desirable. 


AXIOMS    OF    ADMINISTRATION  513 

III.     Output  and  Cost 

The  question  of  the  embodiment  of  skill 
in  machines  or  certain  auxiliary  appliances 
like  jigs,  and  that  of  interchangeability  of 
parts,  bears  on  another  problem  which  is 
also  largely  bound  up  with  questions  of  pol- 
icy. In  a  general  way,  the  more  we  concen- 
trate our  efforts  on  producing  one  line  of 
product  by  specializing  machines,  introduc- 
ing jigs  and  fixtures,  and  introducing  mass 
production,  the  lower  should  be  the  cost  per 
unit  of  product.  In  any  industry,  if  we  in- 
crease volume  of  output  by  improved  proc- 
esses or  by  improved  organization,  or  by 
speeding-up  production,  the  increase  in  out- 
put is  generally  greater  than  the  increase  in 
cost.  In  other  words  the  unit  cost  falls. 
Prof.  Kimball  has  raised  this  observed  re- 
lation between  increased  output  and  lower 
unit  cost  to  the  rank  of  a  principle*  but  we 
cannot  here  so  regard  it.  It  is  a  thing  that 
does  not  necessarily  happen.  In  many  cases 
it  does  not  happen.  Cases  are  not  infre- 
quently met  with  where  the  expenditure  on 
special  appliances,  if  properly  taken  into 
cost,  would  neutralize  the  advantages  gained 

*  See  Principles  of  Industrial  Organization,  p.  251. 


514      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

from  their  larger  output.  Moreover,  just  how 
far  specialization  should  be  carried  out  is 
not  a  problem  of  administration,  but  a  policy 
of  management.  Some  years  ago  the  great 
demand  for  bicycles  led  to  the  adoption  of  a 
policy  of  specialization  by  numerous  firms 
in  that  industry,  and  this  was  carried  to  such 
a  degree  that  when  the  demand  fell  off,  wide- 
spread ruin  to  the  industry  ensued.  It  is  not 
the  administrator's  part  to  say  that  in- 
creased output  should  be  reached  by  the  path 
of  specialization. 

In  minor  matters,  however,  the  decision 
whether  the  manufacture  of  a  particular  ar- 
ticle should  be  made  by  means  of  jigs  and 
fixtures  is  certainly  an  administrative  affair. 
But  in  this  case  the  point  of  view  is  generally 
that  of  attaining  lower  cost,  without  taking 
the  question  of  output  into  account.  It 
would  seem  therefore  that  to  regard  in- 
creased output  as  the  cause  of  lower  unit 
cost  is  putting  the  cart  before  the  horse.  In- 
creased output  may  be  accompanied  by  lower 
cost,  but  not  necessarily  so.  On  the  other 
hand,  the  converse  is  true  under  nearly  all 
circumstances — lower  unit  cost  (except  in  the 
single  instance  that  it  is  procured  by  a  cut 
in  wages  or  expense)  must  necessarily  mean 


AXIOMS    OF    ADMINISTRATION  515 

that  manufacturing  capacity  is  set  free,  or 
in  other  words  that  the  opportunity  for  in- 
creased output  is  thereby  provided.  Whether 
or  not  the  output  is  actually  increased  de- 
pends on  other  than  merely  administrative 
considerations.  Lower  cost  does  not  always, 
though  it  does  usually,  imply  in  its  sequence 
larger  sales. 

The  connection  between  cost  and  output 
can  therefore  be  stated  in  very  simple  terms, 
not  as  a  regulative  principle,  but  as  an  axiom 
of  administration,  viz: — 

4.  Lower  Unit  Cost  Normally  Implies  In- 
creased Capacity  for  Output. 

IV.     Burden  and  Labor  Cost 

We  have  now  to  consider  another  impor- 
tant aspect  of  the  volume  of  work,  namely, 
the  relation  of  burden  to  direct  labor  cost.  It 
is  frequently  assumed  by  executives  that  the 
lowering  of  burden  percentages  is  necessarily 
a  good  sign,  and  that  conversely  if  the  per- 
centage of  burden  to  direct  labor  rises,  it  im- 
plies some  kind  of  reduction  in  efficiency. 
These  assumptions  have  no  validity  as  gen- 
eral principles,  and  are  only  true  in  particu- 
lar cases.    In  other  cases  they  are  not  merely 


516      SCIENCE  AND  PRACTICE    OF   MANAGEMENT 

incorrect,  but  actually  the  reverse  of  the 
facts. 

We  may  define  burden  as  all  the  expenses 
of  a  shop  (including  a  share  of  the  general 
expense  of  administration),  no  part  of  which 
can  be  considered  as  direct  labor.  We  have 
not  to  do  here  with  the  way  in  which  this 
Burden  is,  or  should  be,  distributed  over  in- 
dividual jobs,  but  simply  its  relation  as  a 
whole  to  the  total  of  direct  labor  as  a  whole. 
If  we  consider  that  the  whole  shop  is  en- 
gaged on  one  job,  and  that  all  direct  labor 
is  being  charged  to  this  job,  and  all  burden 
collected  and  expressed  as  a  percentage  of 
direct  labor,  it  will  be  sufficient  for  our  pres- 
ent purpose.  We  may  also  make  another 
assumption,  namely,  that  during  a  given 
period  all  the  machines  were  kept  fully  em- 
ployed, and  full  time  worked  by  all  hands. 

These  assumptions  are  necessary  because 
it  is  desirable  to  eliminate  from  our  problem 
variations  due  to  the  plant  not  being  fully 
employed,  or  to  overtime  being  worked.  We 
wish  to  consider  the  case  of  a  shop  keeping 
the  same  number  of  men  and  the  same  num- 
ber of  machines  steadily  at  work  for  the 
same  number  of  hours  per  day  throughout 
the  whole  period  of  our  observations. 


AXIOMS    OF   ADMINISTRATION" 


517 


TABLE  XX.      SHOWING  HOW  PERCENTAGE  OF  BURDEN  TO  DIRECT 

LABOR  FAILS  TO  CORRESPOND  TO  VARIATIONS  IN  COST. 

(CONSTANT  BURDEN.) 


Item. 

Output. 

Burden. 

Direct 
Labor. 

Per- 
centage. 

Unit 
Cost. 

1 

1000 

100 

100 

100 

.20 

2 
3 

1200 
800 

100 
100 

100 
100 

100 
100 

.16 
.25 

4 
5 
6 

1000 

1200 

800 

100 
100 
100 

130 
130 
130 

77 
77 
77 

.23 
.19 

.28 

7 
8 
9 

1000 

1200 

800 

100 
100 
100 

80 
80 
80 

125 
125 
125 

.18 
.15 
.22 

In  our  first  series  of  observations  the  shop 
expense  (including  administration  charge) 
remains  at  the  same  amount  through  the 
whole  period.  Table  XX  shows  the  effect  on 
the  percentage  of  burden  to  labor,  of  varia- 
tion in  other  factors,  namely  cost  of  direct 
labor,  and  output.  The  first  line  of  the  table, 
Item  1,  shows  normal  conditions  with  which 
all  the  other  observations  are  to  be  compared. 

Item  2  shows  what  happens  when,  with 
normal  labor,  and  normal  burden,  the  output 
is  increased.  Item  3  shows  what  happens 
when  output  falls  off.  In  each  of  these  cases 
the  Burden  percentage  fails  to  move  at  all. 


518      SCIENCE  AND  PEACTICE   OF   MANAGEMENT 

Items  4,  5,  and  6,  show  what  happens  when 
an  increase  of  wages  is  granted  to  direct 
labor.  This  of  course,  means  that  the  total 
cost  of  production  has  gone  up,  but  the  per- 
centage itself  falls.  It  also  falls  to  precisely 
the  same  amount  whether  the  output  remains 
the  same  or  is  increased  or  diminished. 

Items  7,  8,  and  9,  show  what  happens  if  we 
make  a  general  reduction  of  wages.  This  im- 
plies that  cost  of  production  is  reduced,  but 
the  percentage,  on  the  contrary,  rises.  It  also 
is  seen  to  rise  to  the  same  amount,  whether 
output  remains  steady,  increases,  or  dimin- 
ishes. 

In  these  three  groups  of  observations  we 
see  that  the  percentage  of  burden  to  direct 
wages  is  a  very  deceiving  thing.  In  the  first 
group  it  fails  to  reveal  important  changes  in 
output  that  have  happened.  In  the  second 
and  third  groups  it  behaves  in  an  exactly  op- 
posite way  to  what  it  is~ popularly  supposed 
to  behave,  and  again  fails  to  reveal  impor- 
tant changes  in  output. 

Table  XXI  shows  another  series  of  ob- 
servations under  different  conditions.  In 
this  series  the  cost  of  direct  labor  remains 
level  throughout  all  the  observations,  but 
the  amount  of  expense  varies,  and  so  does 


AXIOMS    OF   ADMINISTRATION 


519 


the  amount  of  output.  Item  1,  as  before, 
shows  normal  conditions  with  which  all  the 
other  observations  are  to  be  compared. 


TABLE  XXI.      SHOWING  HOW  PERCENTAGE  OF  BURDEN  TO  LABOR 

FAILS  TO  CORRESPOND  TO  VARIATIONS  IN  COST. 

(CONSTANT  LABOR  COST.) 


Item. 

Output. 

Burden. 

Direct 
Labor. 

Per- 
centage. 

Unit 
Cost. 

1 

1000 

100 

100 

100 

.20 

2 
3 
4 

1000 

1200 

800 

120 
120 
120 

100 
100 
100 

120 
120 
120 

.22 
.18 

.27 

5 

6 

7 

1000 

1200 

800 

80 
80 
80 

100 
100 
100 

80 
80 
80 

.18 
.15 
.22 

Items  2,  3,  and  4  show  what  happens  when 
expense  increases.  In  this  case  the  percent- 
age does  what  it  is  popularly  supposed  to 
do  in  every  case,  namely,  rises  correspond- 
ingly. But  Items  3  and  4  show  on  the  other 
hand  that  this  rise  has  nothing  to  do  with 
output.  In  the  case  of  Item  3,  although  the 
expense  has  risen  20  per  cent,  output  has  also 
risen  20  per  cent  above  normal.  Now  the  net 
result  of  this  combination  is  not  an  increase 


520     SCIENCE  AND  PRACTICE   OF   MANAGEMENT 

in  cost,  but  a  decrease,  yet  the  rising  of  the 
percentage  would  make  us  think  that  shop 
conditions  were  worse  instead  of  better  as 
they  are  in  reality. 

Items  5,  6,  and  7  show  what  happens  when 
expense  decreases.  Here  again,  the  percent- 
age behaves  as  popularly  expected.  But 
again,  as  shown  by  items  6  and  7  its  behavior 
is  independent  of  output.  Item  7  shows  a  20 
per  cent  reduction  both  of  burden  and  output, 
but  the  net  result  of  this  is  an  increase  in 
cost,  though  the  burden  percentage  itself  has 
fallen. 

In  other  words,  the  mere  falling  of  the 
percentage  would  lead  us  to  believe  that 
things  were  going  well,  while  actually  costs 
were  rising. 

In  this  second  series  of  observations  we 
see,  once  more,  that  the  percentage  of  bur- 
den to  direct  labor  is  a  very  deceiving  thing. 
Its  rise  or  fall  corresponds  to  the  real  facts 
of  cost  only  in  the  special  cases  where  the 
amount  of  output  remains  absolutely  steady. 
As  soon  as  the  efficiency  of  the  shop  varies, 
thus  introducing  a  new  relation  between 
amount  of  output  and  the  other  factors,  it 
becomes  actually  deceptive,  and  any  deduc- 
tions based  on  its  rise  or  fall  are  wholly 


AXIOMS    OF    ADMINISTRATION  521 

erroneous,  and  in  some  instances  the  very 
opposite  of  the  facts. 

This  is  not  the  place  to  discuss  the  alter- 
natives to  the  percentage  method  of  dealing 
with  burden.  They  have  been  fully  treated 
elsewhere  by  the  present  author*.  The  im- 
portant point  in  this  instance  is  to  discover 
what  relation  of  burden  to  cost  is  funda- 
mental. 

A  little  consideration  will  serve  to  show 
that  if  the  ratio  between  burden  and  direct 
labor  is  one  that  has  no  relation  to  output, 
it  can  have  no  relation  to  efficiency.  This 
leaves  us  face-to-face  with  the  position  that 
the  only  way  to  judge  relative  efficiencies 
is  by  comparing  the  amount  of  burden  in 
unit  cost  A  with  that  in  unit  cost  B.  Also 
the  amount  of  direct  labor  in  A  with  that 
in  B  (A  and  B  being  the  cost  of  the  same 
article  made  at  different  times  or  by  differ- 
ent processes).  But  this  consideration  shows 
how  absurd  it  is  to  calculate  Burden  as  a 
percentage  on  direct  labor,  since  by  so  do- 
ing we  ensure  that  the  amount  of  burden  in 
A  and  B  will  always  be  proportional  to  the 
amount  of  direct  labor  in  these  respective 

*  See  ' '  The  Proper  Distribution  of  the  Expense  Bur- 
den, "  2nd  edition,  1913;  also  " Production  Factors," 
1910.     Both  published  by  The  Engineering  Magazine  Co. 


522      SCIENCE   AND   PRACTICE    OF    MANAGEMENT 

unit  costs,  although  we  may  be  quite  aware 
that  wholly  different  processes,  entailing 
wholly  different  calls  on  indirect  expense, 
have  been  used  in  producing  A  and  B  re- 
spectively. 

Nevertheless  while  the  practice  of  employ- 
ing percentages  to  "distribute"  burden  con- 
tinues its  hold  on  the  affections  of  executives 
who  would  shrink  with  horror  from  such  a 
deceptive  method  if  applied  to  their  cash 
book,  it  is  at  least  desirable  to  understand  its 
limitations  and  the  dangers  that  lurk  in  the 
popular  ideas  with  regard  to  its  significance. 
The  next  best  thing  to  adopting  an  improved 
method  is  to  understand  the  whole  truth 
about  a  defective  method,  and  this  we  pro- 
pose to  put  in  an  axiomatic  form. 

An  axiom  being  usually  defined  as  a  self- 
evident  truth,  it  may  be  objected  that  to 
make  an  axiom  of  this  somewhat  intricate 
demonstration  is  stretching  a  point  unduly. 
The  truth  would,  however,  be  sufficiently 
self-evident  were  it  not  that  the  adoption 
of  the  percentage  method,  at  first  introduced 
as  a  book-keeping  "dodge",  and  since  erected 
into  all  the  dignity  of  a  working  principle, 
has  led  to  perverse  habits  of  thought  on  this 
subject.    Had  the  unlucky  device  of  percent- 


AXIOMS    OF    ADMINISTRATION  523 

ages  of  this  kind  been  brought  to  notice  only 
after  a  scientific  method  of  distributing  bur- 
den had  come  into  regular  use,  its  fallacy 
would  have  been  self-evident  enough.  In  the 
writer's  opinion,  at  any  rate,  the  matter  is 
sufficiently  clear  after  a  little  examination  to 
warrant  the  true  relation  of  Burden  to  Cost 
to  be  stated  as  an  axiom  for  all  practical  pur- 
poses. It  is  therefore  stated  in  the  following 
terms : — # 

5.  The  Amount  of  Direct  Labor  and  of  Burden 
in  Unit  Cost  (and  Not  the  Ratio  or  Percentage) 
Is  Alone  the  Test  of  Efficiency. 


V.     The  Influence  of  Capital  on   Cost 

The  proportion  of  capital  employed  in 
modern  industry,  whether  reckoned  per  unit 
of  product  or  per  employe,  constantly  tends 
to  increase.  In  some  industries,  in  fact,  its 
increase  is  rapid  and  continuous.  Yet  in 
these  same  industries  the  comfortable  old 
ways  of  finding  costs,  without  accurately  tak- 

*  The  author  is  indebted  to  Mr.  H.  L.  Gantt  for  calling 
his  attention  to  this  subject,  viz.,  the  perverse  behavior 
of  burden  percentages  where  unit  cost  is  actually  falling. 


524      SCIENCE   AND    PRACTICE    OE    MANAGEMENT 

ing  the  incidence  of  capital  into  account,  still 
goes  on.  It  seems  desirable  to  discuss  the 
matter  briefly,  if  only  to  establish  the  axiom 
that  "capital  is  a  factor  in  cost". 

There  is  no  difference  in  principle,  and 
there  cannot  be  safely  made  any  difference 
in  practice,  between  capital  that  is  trans- 
formed quickly  into  something  else,  and  that 
which  is  slowly  transformed.  "With  one  ex- 
ception, no  capital  is  really  "fixed",  but  only 
relatively  so.  When  capital  in  cash  is  trans- 
formed into  wages,  the  importance  of  con- 
necting wages  with  the  "cost"  of  work  is 
recognized  by  everyone.  But  when  it  is 
transferred  into  such  various  things  as  pat- 
terns, files,  emery-wheels,  steam-engines  and 
dynamos,  and  heavy  productive  machinery, 
it  has  the  appearance  of  being  more  or  less 
"fixed" — slightly  so  in  the  case  of  a  file, 
which  wears  out  a  little  while  you  watch 
it,  but  very  much  so  in  the  case  of  a  steam 
engine,  a  punching  machine,  a  large  crane, 
or  a  factory  building  of  steel  and  concrete. 

Actually,  however,  when  capital  is  trans- 
formed into  any  of  these  things,  it  is  no 
more  really  fixed  than  when  it  is  in  the  form 
of  a  file.  With  one  exception,  and  that  ex- 
ception is  land,  there  is  no  form  of  capital 


AXIOMS    OF    ADMINISTRATION  525 

investment  that  does  not  begin  to  decay  and 
perish  from  the  moment  of  its  completion, 
and  one  day  come  to  the  state  in  which  it  is 
no  longer  useful  for  the  purpose  for  which 
it  was  created. 

Even  the  exception  of  land,  above  men- 
tioned, is  not  a  universal  exception.  Where 
land  is  held  on  a  terminable  tenure,  for  a 
term  of  years,  its  value  is  constantly  shrink- 
ing like  Balzac's  magic  skin,  and  this  shrink- 
age begins  from  the  moment  the  lease  is 
signed.  Generally,  however,  land  value  is 
not  subject  to  decay,  since  land  does  not  rust, 
it  does  not  wear,  nor  as  a  rule  does  it  be- 
come obsolescent.  In  many  cases,  indeed,  it 
tends  to  increase  in  value,  if  in  the  neigh- 
borhood of  cities. 

All  other  forms  of  capital  tend  to  disap- 
pear. If  a  plant  were  started  today,  and 
no  part  of  it  were  renewed,  in  thirty  years 
the  greater  part  of  it  would  be  as  valueless 
as  if  it  had  never  existed.  The  finer  the 
kind  of  plant  the  more  complete  its  exhaus- 
tion, or  to  put  it  another  way,  the  earlier  the 
period  of  valuelessness  would  be  reached. 

To  begin  with  we  have  active  capital,  in  the 
form  of  cash.  This  is  transmuted  into  vari- 
ous  things,   plant   and  machinery   amongst 


526      SCIENCE   AND  PRACTICE    OF    MANAGEMENT 

others,  and  at  the  end  of  a  given  period  noth- 
ing remains  bnt  scrap  valne.  Where  has 
this  capital  gone? 

The  answer  to  this  qnestion  is  coming  to 
be  a  controlling  one  as  regards  costs  of  man- 
ufacture because  the  progress  of  industry 
demands  a  constantly  increasing  proportion 
of  capital  locked  up  in  "fixed"  forms.  There 
can  only  be  one  answer — namely,  that  since 
the  whole  object  for  which  the  capital  was 
spent  and  the  plant  established  is  the  mak- 
ing of  product,  it  is  evident  that  this  capital 
has  been  exhausted  in  producing  goods,  or 
in  other  words,  the  original  capital  has  been 
transformed  into  product.  The  only  excep- 
tions to  this  are  the  scrap  value  of  the  ex- 
hausted plant  which  remains  on  our  hands, 
the  "spoiled"  product  which  had  no  com- 
mercial value,  and  the  loss  incurred  when  the 
plant  or  any  portion  of  it  lay  idle. 

When  we  pay  wages,  whether  piecework 
or  daywork,  the  process  is  easy  to  follow. 
We  take  so  much  out  of  our  capital  in  bank, 
and  pay  it  to  the  man  in  exchange  for  so 
much  product.  We  say  that  that  amount  of 
product  has  "cost"  that  amount  of  wages. 
The  transaction  is  over  and  done  with  in 
a  few  moments. 


AXIOMS    OF    ADMINISTRATION  527 

But  how  much  of  our  so-called  "fixed" 
capital  have  we  used  up  in  producing  that 
same  amount  of  product?  If  the  man  has 
used  up  a  file  on  a  job,  we  follow  quite 
easily  the  idea  that  the  part  of  our  capital 
represented  by  the  file  has  passed  into  the 
job.  But  what  share  of  all  the  great  capi- 
tal investment  represented  by  the  plant  and 
buildings  passes  into  the  product  hour  by 
hour? 

If  this  capital  passed  into  all  jobs  in  equal 
proportion  the  matter  would  be  quite  simple 
to  deal  with.  But  this  is,  in  most  cases, 
very  far  from  being  the  case.  Jobs  call  for 
different  machines  and  these  machines  not 
only  represent  great  differences  of  capital 
in  themselves,  but  they  make  demand  in  very 
different  proportions  on  the  other  forms  of 
fixed  capital  invested  in  the  group  of  organi- 
zation. Different  shares  of  floor  space,  of 
the  power  service,  of  the  cranage  and  trans- 
port service,  etc.,  are  called  for  according  to 
the  nature  of  the  job. 

Nor  is  this  all.  As  all  capital  tends  to  de- 
cay, so  is  it  necessary  to  repair  it.  Also, 
for  the  most  part,  it  requires  living  attend- 
ants to  enable  it  to  perform  its  functions.  The 
power  service  has  a  whole  group  of  attend- 


528      SCIENCE   AND    PRACTICE    OF    MANAGEMENT 

ants,  the  buildings  must  be  repaired,  kept 
clean,  heated  and  lighted,  cranes  must  be 
manned,  and  so  forth.  So  that  it  is  not  only 
the  capital  locked  up  in  organization  services 
that  has  to  be  reckoned  with — there  is  also 
all  the  expenditure  associated  with  its  up- 
keep  and  functioning.  Each  of  these  impor- 
tant groups  of  expenditure  has  its  separate 
influence  on  the  working  power  of  machines, 
and  each  machine  absorbs  their  assistance 
in  different  proportion. 

Taken  together,  these  items  made  a 
formidable  total  in  the  cost  of  running  ma- 
chines. But  the  essence  of  the  argument  is 
that  some  machines  should  bear  much  less  of 
this  cost  than  others.  They  make  less  de- 
mand on  the  capital  invested  in  the  Produc- 
tion Factors,  and  on  the  services  and  main- 
tenances connected  therewith,  than  other  ma- 
chines, and  this  difference  is  quite  as  large 
in  range  as  the  difference  between  the  wage 
rates  of  the  labor  employed  in  the  shop. 

How  then  can  we  know  the  true  cost  of  a 
job  unless  we  know  both  the  machine  cost 
and  the  labor  cost?  The  capital  we  employ 
in  paying  wages  is  charged  to  jobs  accord- 
ing to  the  exact  sums  we  have  taken  from 
our  capital  and  spent  in  wages  on  those  jobs. 


AXIOMS    OF    ADMINISTRATION  529 

But  the  interest,  depreciation,  maintenance 
and  service  on  the  capital  expended  in  every- 
thing else  but  wages  is  not  charged  to  jobs 
according  to  the  exact  sums  (represented  by 
the  machine  rent)  which  have  been  expended 
on  those  jobs,  but  by  some  "easy"  method  of 
percentages,  *whose  only  function  is  to  make 
ignorance  look  like  knowledge. 

To  sum  up  this  question  of  capital.  Every 
day  so  much  of  our  " fixed"  capital  disap- 
pears out  of  the  plant,  and  carries  with  it 
all  the  expenses  for  its  upkeep  and  function- 
ing. In  amount  it  is  an  enormous  percentage 
of  the  total  cost,  rarely  less  than  75  per  cent 
on  labor,  and  no  system  of  costs  can  possibly 
be  true  which  does  not  account  for  this  ex- 
penditure as  and  where  it  is  incurred  in  dif- 
ferent proportions  by  different  productive 
machines.  For,  as  has  been  said  before,  the 
whole  object  for  which  this  investment  of 
capital  is  incurred  is  to  keep  productive  ma- 
chines at  work,  so  that  they  may  turn  out 
Product. 

Mention  has  been  made,  in  the  foregoing 
discussion,  of  the  machine  alone.  In  fact  the 
salient  feature  in  modern  production,  if  only 
we  regard  it  from  the  right  standpoint,  is 
the  expense  of  machine  operation.     But  as, 


530      SCIENCE   AND    PRACTICE   OF    MANAGEMENT 

in  all  plants  of  the  assembling  industries, 
there  are  men  who  do  not  nse  any  machines, 
their  existence  cannot  be  ignored.  Actually, 
however,  we  find  that  the  existence  of  direct 
productive  labor  engaged  on  processes  which 
do  not  call  for  machinery,  alongside  labor 
that  does,  makes  the  argument  a  much 
stronger  one — for  such  men  make  hardly  any 
claim  on  capital  investment  at  all.  Very  lit- 
tle of  the  capital  invested  and  maintained 
in  the  organization  services  goes  into  their 
work. 

In  all  cases  they  call  on  the  land-buildings 
and  the  heating  and  lighting  services,  but 
beyond  this  they  make  little  or  no  call  on 
capital.  Yet  in  most  plants,  their  particular 
work  is  loaded  up  with  burden  in  the  same 
proportion  as  work  done  on  the  most  expen- 
sive machine  in  the  place,  using  the  most 
power,  taking  up  a  large  floor  space,  and 
calling  for  heavy  transport  services.  The 
peculiarly  illogical  character  of  this  kind  of 
costing  must  be  self-evident.  There  is  no 
pretense  to  accurate  ascertainment  of  the  in- 
fluence of  capital  on  production  of  such  a  sys- 
tem. As  a  by-product,  the  comparative  cost- 
liness of  doing  special  work  by  hand  and 
rigging  up  a  machine  for  doing  it  is  impos- 


AXIOMS    OF    ADMINISTKATIOX  531 

sible  to  ascertain.  It  is  a  splendid  method 
for  hiding  facts,  and  getting  inaccurate  re- 
sults, when  it  would  be  just  as  easy  to  ob- 
serve the  true  incidence  of  capital  in  every 
operation,  however  carried  out. 

The  first  line  of  control  is,  then,  to  record 
and  thus  to  watch  over  the  various  trans- 
mutations of  capital  that  are  going  on  from 
day  to  day.  Provided  that  each  change  in 
the  form  of  capital  comes  at  the  right  time 
and  is  in  the  right  direction  and  the  right 
amount,  profits  will  be  in  proportion  to  the 
speed  at  which  these  transmutations  take 
place.  In  other  words,  as  pointed  out  in  an- 
other place,  a  fast-moving  stream  of  work 
is  the  ideal  condition  in  a  factory.  Dividends 
are  dependent  not  merely  on  profits,  but  on 
profits  made  within  certain  limits  of  time. 
The  factory  that  turns  out  product  yielding 
say  $1,000  profit  in  six  days  will  be  ahead 
of  the  similar  factory  making  $1,500  profit 
on  the  same  output,  but  (perhaps  by  using 
cheap,  slow  labor)  taking  twelve  days  to 
do  it. 

Slow  turning  over  of  capital  is  one  of  the 
ways  in  which  profits  are  diminished,  but  in 
such  cases  the  capital  does  actually  re- 
appear.    But  another   cause   of  diminished 


532      SCIENCE   AND    PRACTICE    OF   MANAGEMENT 

profits  is  the  failure  of  capital  to  reappear 
at  all.  It  gets  transmuted  into  forms  that 
cannot  be  made  further  use  of,  or  only  par- 
tially so,  as  a  spoiled  casting  on  which  con- 
siderable machining  work  has  been  done,  or 
a  faulty  rubber  product  that  has  already 
been  vulcanized.  Such  happenings  are  known 
as  "wastes",  and  are  a  more  prolific  cause 
of  reduced  profits  than  is  commonly  realized 
until  very  exact  measures  are  taken  for  their 
detection. 

Hitherto,  the  influence  of  capital  on  pro- 
duction has  been  but  little  regarded,  though 
the  analysis  of  the  manufacturing  census  re- 
cently published  in  The  Engineering  Maga- 
zine by  Mr.  A.  G-.  Popcke  shows  how  im- 
portant a  matter  it  is  getting  to  be.  Briefly, 
Mr.  Popcke  showed  that  the  capital  employed 
in  production  has,  on  the  average,  increased 
during  the  brief  space  of  ten  years,  20  per 
cent  more  than  the  value  of  the  product  has 
increased.  How  far  this  is  due  to  actual  in- 
creased investment  in  the  factors  of  produc- 
tion is  shown  by  the  further  fact  that  over 
40  per  cent  more  horse  power  per  individual 
operator  is  required  to  drive  machines  than 
ten  years  ago. 

Speaking  generally  this  means  larger  and 


AXIOMS    OF   ADMINISTRATION"  533 

more  powerful  machines,  entailing  larger 
floor  space,  increased  call  on  shop  transport 
services,  and  these  of  a  higher  type,  and  a 
call  for  capital  in  the  indirect  services  or 
organization  on  an  increasing  scale.  This 
general  call  for  increased  fixed  investment 
is  confirmed  by  the  fact  that  capital  invest- 
ment has  increased  46  per  cent  per  man  em- 
ployed in  ten  years.  The  importance  of  re- 
garding the  activities  of  a  plant  as  a  series 
of  changes  in  capital  seems  to  be  fairly 
proven  by  these  remarkable  figures. 

In  all  businesses  in  which  the  product  is 
not  uniform,  but  consists  of  different  kinds 
of  articles,  each  made  by  different  sequences 
of  machine  work,  and  taking  different  quan- 
tities of  such  machining,  the  influence  of  capi- 
tal is  very  much  greater  than  generally  sus- 
pected. In  many  instances  it  may  have  a 
controlling  influence  upon  what  should  be  re- 
garded as  the  real  cost  of  the  different  items 
of  product.* 

We  have  now  seen  that  every  act  of  manu- 
facture implies  a  corresponding  conversion 
of  fixed  capital  into  product,  and  that  this 
issue   cannot  be  evaded  without   producing 

*  The  methods  by  which  capital  is  permitted  to  have 
due  influence  in  cost  have  been  covered  in  the  author's 
books  on  the  Expense  Burden  and  on  Production  Factors. 


Date  Due 

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BOSTON  COLLEGE 


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